If you glance at the report from Stats Canada you will see the usual fairly good news in terms of the Consumer Price Index for July:
The Consumer Price Index (CPI) rose 1.3% in the 12 months to July, after increasing 1.5% in June.
This sounds heartening (having grown up in the days of inflation running at 11% or higher), but again, you have to peel the onion to get a better view of what is really happening.
Main contributors to the 12-month change in the CPI:
Main upward contributors:
- Purchase of passenger vehicles (+5.4%)
- Homeowner’s replacement cost (+3.6%)
- Electricity (+5.4%)
- Food purchased from restaurants (+2.7%)
- Air transportation (+7.1%)
Main downward contributors:
- Gasoline (-14.0%)
- Natural gas (-10.3%)
- Fuel oil (-13.4%)
- Mortgage interest cost (-0.7%)
- Children’s clothing (-4.1%)
So this data shows that Electricity (the alleged energy of the future) keeps going up in price, and Gasoline prices continue to obfuscate the Inflation data. In Ontario electrical rates are very high and will be going up
As you can see from the graphic, gasoline continues to skew the data badly.
The interesting other things that are lowering the index is Mortgage Interest Costs, which won’t slow down the scorching hot summer Real Estate market in many cities.
Bank of Canada’s core index
The Bank of Canada’s core index increased 2.1% in the 12 months to July, matching the rise in June.
This is still in the zone where the bank may not take Interest Rate action, but note that the Bank’s rate is significantly higher than the Stats Canada rate.
Reports from the Past While.
If you want to have a walk down memory lane about how prices have gone up, here you go.
- Zap! Electricity Prices Pushes Inflation in June
- Expensive Food and Shelter in April in Canada
- Good Food Still Is Not Cheap in Canada (Inflation for March)
- Food Prices Continue to Rise for February
- Veggies up 18.2 pct in Canada
- Food Prices up 4.1% For 2015 in Canada
- Gas Prices Drive Down Inflation in December to 1.5%
- Lower Prices in January in Canada, Pull the Other Leg
- Expensive Food in Canada in March
- Prices up 0.8% in April or More Fun with Numbers
- Inflation at 0.9% for May (maybe)