Canada July Inflation Rate Steady at 2%

The annual inflation rate in Canada was at 2 percent in July 2019, unchanged from the previous month and above market expectations of 1.7 percent, as a slowdown in cost of services was offset by a rise in prices of goods, namely durable goods and food

Year-on-year, prices eased for shelter (2.3 percent from 2.5 percent in June); transportation (1.5 percent from 1.6 percent), namely air transportation (4.6 percent from percent) and travel tours (7.5 percent from percent); household operations, furnishings and equipment (0.3 percent from 1.2 percent); clothing and footwear (1.1 percent from 1.6 percent) and alcoholic beverages, tobacco and recreational cannabis (1.2 percent from 1.4 percent). On the other hand, cost advanced further for food (3.8 percent from at 3.5 percent), recreation, education and reading (2.7 percent from 2.0 percent) and health and personal care (1.5 percent from 1.1 percent).

Regarding special aggregates of the CPI, cost of services slowed to 2.4 percent in July from 2.8 percent in June, as consumers paid less for telephone services (-2.5 percent) due to an industry-wide shift in the pricing structure of cellular data plans amid intensifying competition among wireless providers. The introduction of unlimited data plans coincided with a reduction in the subsidies for wireless devices, shifting more of the cost of devices to consumers. Meanwhile, cost of goods rose 1.3 percent, after increasing 0.9 percent in the prior month, boosted by durable (1.9 percent from 1.4 percent), semi-durable (0.6 percent from 0.4 percent) and non-durable goods (1.3 percent from 0.8 percent). Additionally, cost of energy declined at a softer pace (-3.2 percent from -4.1 percent).

On a monthly basis, consumer prices went up 0.5 percent, rebounding from a 0.2 percent fall in June and compared with market forecasts of a 0.2 percent gain.

The BoC's annual core inflation, which excludes volatile items, was steady at 2 percent, below market consensus of 2.3 percent.

 Canada July Inflation Rate Steady at 2%

Statistics Canada | Stefanie Moya |
8/21/2019 12:57:37 PM