The annual inflation rate in Alberta in August was less than the Canadian average, according to data released on Wednesday by Statistics Canada.
The federal agency said consumer prices in the province rose 1.3 per cent year over year while for Canada prices were up 1.9 per cent.
Month over month, prices in Alberta fell by 0.1 per cent, which was the same amount as across Canada.
“Looking at the two major cities, the year-over-year inflation rate in Edmonton was 1.3 per cent compared to just 0.9 per cent in Calgary,” said ATB Financial’s Economics and Research Team in its daily economic update The Owl.
“The low rate of inflation in Alberta reflects the province’s slow pace of economic growth and relatively weak labour market conditions. So, while we all like lower prices at checkout, Alberta’s current CPI (Consumer Price Index) is another sign our economy is on shaky ground.
“Unpacking the overall index, we see gasoline prices in Alberta were down by 20.6 per cent on a year-over-year basis in August while food prices were up 3.9 per cent. Clothing (-0.5 per cent) and transportation costs (-0.4 per cent) edged down, but shelter (+1.6 per cent) and health and personal care costs (+1.2 per cent) increased.”
James Marple, senior economist with TD Economics, in a commentary note said: “Some volatility in the usual suspects aside, inflation is downright boring in Canada. This will leave the Bank of Canada looking to signs in other economic data, namely the balancing act between a resilient domestic economy and elevated external risks.
“After a strong second quarter, the Canadian economy looks to slow to somewhere between one per cent and 1.5 per cent (annualized) in quarter three. In and of itself, this may not be too concerning, but alongside still simmering trade disputes and signs that global growth continues to struggle, we would not be surprised to see the Bank take out some insurance in the form of a rate cut later this year, moving it closer to the majority of its advanced economy peers.”
In a commentary note, Josh Nye, senior economist with RBC Economics, said geopolitical events have been in focus this week and could have implications for the CPI in the months ahead.
“An attack on a major oil process facility in Saudi Arabia over the weekend (which took a good chunk of the country’s production offline) drove a sharp increase in global oil prices on Monday,” he said. “While a larger risk premium is likely to be embedded in oil prices going forward, about half of the immediate increase in crude prices has now been retraced. The situation remains fluid, but for now it looks like consumers aren’t staring down the sharp increase in gasoline prices that was feared earlier this week.”
Mario Toneguzzi is a Troy Media business reporter based in Calgary.