Inflation moderated a little in July where the year over year rate was 1.3%, blamed mostly on new cars, restaurant food, meat, and electricity (a very eclectic blend of things in our lives), Stats Canada published with their Monthly Inflation Report for July 2012.
As can be seen from the following graph, the rate of increase is moderating, but it still continues to be positive, but for now well below 2.0% ( a magic level for the Bank of Canada).
The only place we are seeing a drop in price is footwear and clothing. The one area to watch closely is pointed out by our Stats Canada friends:
Food prices rose 2.1% in the 12 months to July following a 2.0% advance in June. These two increases were the lowest year-over-year gains in food prices since the beginning of 2011. Leading the July increase were higher prices for food from restaurants (+2.4%), meat (+5.3%) and cereal products (+3.7%). In contrast, prices for fresh vegetables declined for the fifth consecutive month.
This is worrisome given that most of eastern Canada is in a Level 2 drought, which will mean higher prices for food. We are already hearing that Apple production is down, and even with the rain that is finally arriving, it may not be enough.
A slight dip in this graph is better news, but will the downward trend continue?
Bank of Canada’s core index
Remember that the Bank of Canada has their own way of measuring inflation, thus this month it is higher, but still under the magical 2.0% threshold:
The Bank of Canada’s core index rose 1.7% in the 12 months to July, following a 2.0% gain in June.
On a monthly basis, the seasonally adjusted core index was unchanged in July for the second consecutive month.
The Big Table
Here is one of the 3 Big tables published by Stats Canada, have a look at all of them:
|Relative import1||July 2011||June 2012||July 2012||June to
to July 2012
|All-items Consumer Price Index (CPI)||100.002||120.0||121.6||121.5||-0.1||1.3|
|Household operations, furnishings and equipment||11.55||110.7||113.1||113.0||-0.1||2.1|
|Clothing and footwear||5.31||89.7||90.5||89.1||-1.5||-0.7|
|Health and personal care||4.95||116.7||118.9||118.5||-0.3||1.5|
|Recreation, education and reading||11.20||106.8||106.7||107.2||0.5||0.4|
|Alcoholic beverages and tobacco products||2.91||136.1||137.5||137.6||0.1||1.1|
|All-items CPI excluding energy||89.92||117.0||118.8||118.7||-0.1||1.5|
|All-items CPI excluding food and energy||73.93||114.3||116.2||115.8||-0.3||1.3|