For the first time in a year, the increase in Canada’s inflation rate has declined.
According to a Consumer Price Index report released by Statistics Canada, the national inflation rate fell to 7.6 percent in July, after an 8.1 percent gain in June.
Statistics Canada attributes the decline in the rate of increase to slower year-over-year growth in fuel prices. Gasoline prices have declined on account of Covid-19 public health restrictions in China and a drop in demand in the United States.
Gasoline prices rose 35.6 percent year-over-year in July after their 54.6 percent spike in June. Consumers paid 9.2 percent less at the pump in July versus June. That marked the largest monthly decline since April of 2020.
Higher interest rates and elevated bond yields also contributed to a 1.7 percent increase in the year-over-year mortgage interest cost index – a first-time increase since September 2020.
Owned accommodation expenses increased 9.7 percent year-over-year, while the 9.1 percent increase in the cost of homeowners’ replacement reflects overall cooling of the Canadian housing market.
The cost of rent increased 4.9 percent in July 2022, compared to July 2021. This follows June’s 4.3 percent increase. According to the Aug. 16 release, prices for non-durable goods like natural gas and groceries continued to rise in July.
Statistics Canada says food prices shot up by 9.9 percent year-over-year, in July. That’s a jump from June’s 9.4 percent. The cost of bakery products went up 13.6 percent – a consequence of high wheat prices that stem from higher input costs and global supply chain uncertainty related to Russia’s invasion of Ukraine.
Prices for in-person services – including flights, restaurant meals, and hotel stays – also contributed to the month-over-month increase. Accommodation costs have jumped 47.7 percent in July 2022 versus July 2021 and food purchased from restaurants has increased 7.3 percent.
Travel and in-person gatherings have become more expensive, with airfares rising 25.5 percent in July, the result of a strong demand for flights.
StatsCan noted that general prices have risen 6.6 percent year over year in July, following June’s 6.5 percent increase.
Average price increases still exceeded year-over-year increases in hourly wages seen in July – which were up 5.2-per-cent. However, the disparity between consumer inflation and purchasing power shrunk, compared to June.
Sam Macdonald is a reporter with Huddle, an Acadia Broadcasting content partner.
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