Canada Inflation Rate Up to 1.2% in July


Consumer prices in Canada increased 1.2 percent year-on-year in July of 2017, higher than a 1 percent rise in June and in line with market expectations. Transportation and shelter cost made the highest upward contributions while prices of household operations, furnishings and equipment and clothing and footwear fell.

Year-on-year, transportation costs rose 1.9 percent, following a 0.6 percent increase in June. Gasoline prices contributed most to the gain in prices, as well as to their acceleration, rising 4.6 percent after 1.4 percent decline in June. The purchase of passenger vehicles index increased 0.2 percent after declining 0.2 percent. At the same time, passenger vehicle insurance premiums rose at a slower rate.

The shelter index increased 1.3 percent after rising 1.6 percent in June. Homeowners' replacement costs contributed the most to the gain in prices, rising 4.1 percent. Prices for natural gas (+9.7 percent) increased at a slower rate. Meanwhile, the electricity index recorded its largest decrease since April 2003, down 9.1 percent, following a 5.3 percent decline in June. The decline at the national level largely reflected legislated price declines in Ontario.

Consumer prices for food rose 0.6 percent, matching the gain in June.

The health and personal care index increased 2.2 percent, its largest gain since May 2011. This increase is partly attributable to the non-prescribed medicines index, which grew 4.4 percent after a 1.2 percent increase in June.

In July, the household operations, furnishings and equipment index declined on a year-over-year basis for the first time since August 2006, down 0.1 percent. The furniture index contributed the most to this decline, down 2.9 percent. The telephone services index increased 0.1 percent  after rising 2 percent. Prices for household appliances (-2 percent) declined less.

Clothing and footwear prices decreased 0.1 percent after a 1.7 percent decline in June. Prices for men's clothing and women's clothing declined less. At the same time, prices for footwear rose 1.6 percent in July, following a 0.3 percent increase in June.

On a monthly basis, consumer prices were flat after edging down 0.1 percent in June.

The core index rose 0.9 percent on the year, the same as in June and remaining the lowest annual core inflation since February of 2011.


Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com
8/18/2017 12:42:52 PM