The good news is that the inflation rate for July in Canada fell to 7.6 per cent, according to Statistics Canada, and it’s the first time that there’s been a decrease from the previous month in a year.
That’s your happy thought for the day, but it might be wise to put any celebrations on pause. There are no guarantees going forward.
In June, the inflation rate was at 8.1 per cent, with gasoline prices playing the major role, but in July, prices at the pumps dropped 9.2 per cent. Ontario saw the largest decrease at 12.2 per cent.
Certainly, that’s positive news for a golf operation or business with vehicles and/or machinery to fuel on a regular basis, but prices were still up 35.6 per cent year-over-year in July.
Food and beverage, on the other hand, is still dealing with an upward trend as prices purchased from stores increased more year-over-year in July at 9.9 per cent than in June at 9.4 per cent.
If you have to go out of town on business for a buying show for example, air fare went up 25.5 per cent in July compared to the previous month and accommodation increased 47.7 per cent compared to a year earlier. Restaurant prices are also up.
As it tries to cool inflation, the Bank of Canada will continue raising interest rates in early September after it hiked rates last month a full percentage point to 2.5 per cent.
As interest rates make it more difficult to carry a mortgage and with rent becoming more expensive, discretionary dollars become more scarce.
Tuesday’s inflation report could be a temporary blip on the radar, or it could be the start of something positive, but one thing is certain. The economic challenges aren’t over and likely won’t be for some time.
The Statistics Canada report is here.