Canada's annual inflation rate slowed down for the third month in a row, reaching 2% in August 2024. This is the lowest rate since February 2021, and it slightly beat forecasts of 2.1%, hitting the central bank's target for the first time in over three years.

A significant factor in this decline was a 5.1% drop in gasoline prices, influenced by both lower current prices and base-year effects. Clothing and footwear prices also continued their downward trend, falling for the eighth straight month with a 4.4% drop in August, compared to a 2.7% decline in July.

Shelter costs, which make up about 30% of the CPI basket, increased by 5.3% in August, a slight dip from 5.7% in July. Meanwhile, excluding gasoline, inflation rose by 2.2%, down from 2.5% in the previous month.

Core inflation measures also cooled, reaching their lowest levels in 40 months. On a monthly basis, CPI decreased by 0.2%, surprising expectations of no change, after a 0.4% increase in July.