According to data released by Statistics Canada on Wednesday, nationwide gas prices decreased 3.6{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936} in the past month. They are still up 13.7{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936} from where they were a year ago, although this is a decrease from the 17.8{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936} annual growth recorded the month prior.
Last month, the cost of food and rent increased but the price of fuel and furniture decreased. As a result, Canada’s inflation rate decreased to 6.8{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936}.
Last month, grocery costs rose at an annual rate of 11.4{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936}, up from the 11{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936} increase witnessed in October. The cost of a fill-up may be gradually declining from record highs, but the expense of filling one’s stomach is still rising astonishingly quickly.
Over the previous 12 months, a number of food products have increased over normal, including:
- Edible fats and oils are up 26{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936}.
- Tea and coffee consumption is up 16.8{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936}.
- Egg sales are up 16.7{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936}.
- Cereal items had a 15.7{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936} increase.
- Bakery goods increased by 15.5{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936}.
The price of maintaining a roof over one’s head is also rising quickly, with overall housing prices up 7.2{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936} in the previous year.
In the last year, mortgage interest rates have climbed by 14.5{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936} while rent has increased by 5.9{d38a898658503095d09ccca72b3373e8fa824aa4f0215737cc70c89fc7ca3936} in the category of housing. According to Bank of Montreal economist Doug Porter, this is the quickest rate of rent growth since the early 1990s.
It’s becoming obvious, according to Porter, that the road for inflation to return to a more normal level will be a “achingly slow process,” since costs for commodities like furniture and autos are still rising, albeit more slowly than previously.
The fact that several indicators of core inflation are still moving upward is a strong warning sign of ongoing underlying pressures, he added, even though reduced pump prices would help down next month’s rate.
