Canada Inflation Rate Slows in July


Canada annual inflation decelerated for the first time in five months to 2.1 percent in July from 2.4 percent in June. Higher prices for shelter and food contributed the most to the rise in the CPI, while transport cost put downward pressure.

Shelter costs rose 3.0 percent in the 12 months to July, after advancing 2.9 percent in June. Natural gas prices increased 20.4 percent in July compared with the same month the previous year. Consumers also paid more for homeowners' home and mortgage insurance as well as property taxes on a year-over-year basis in July.

Food prices increased 2.9 percent year over year in July, matching the rise in June. Prices for food purchased from stores rose 3.2 percent in the 12 months to July, led by higher prices for meat (+9.2 percent). Prices for fresh vegetables rose 7.5 percent on a year-over-year basis in July, after increasing 9.5 percent in June. On a month-to-month basis, prices for fresh vegetables fell 3.0 percent in July. Food purchased from restaurants cost 2.1 percent more in July compared with the same month a year earlier.

Transportation costs rose 1.3 percent on a year-over-year basis in July, a smaller gain than in June (+2.2 percent). Gasoline prices increased 2.1 percent in the 12 months to July, after rising 5.4 percent in June. On a monthly basis, consumers paid 1.9 percent less for gasoline, with prices falling more in Western Canada than in Eastern Canada. In addition, prices for the purchase of passenger vehicles rose 1.3 percent year over year in July, following a 1.6 percent increase in
June.

The index for alcoholic beverages and tobacco products increased 4.7 percent in the 12 months to July. This rise was mainly due to a 10.7 percent year-over-year advance in cigarette prices. In 2014, the federal excise tax on tobacco, as well as the tobacco taxes in Newfoundland and Labrador, Quebec, Ontario and British Columbia increased.

On a monthly basis, consumer prices fell for the first time in six months by 0.2 percent.

Canada Inflation Rate Slows in July


Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com
8/22/2014 1:41:45 PM