WATCH ABOVE: The monthly budget of Canadians is taking a hit, as July’s inflation numbers show prices increased by 1.3 per cent. Any little drop in the price of gas is offset by the rising costs of to fill your grocery cart. As Reid Fiest explains, it’s only expected to get worse.
OTTAWA – The annual pace of inflation, or growth in the prices consumers pay, increased to 1.3 per cent in July, the federal statistics agency said Friday, driven by the higher cost of food and most other categories of consumer items.
Food prices were up 3.2 per cent compared with a year ago led by meat prices, which rose 6.1 per cent. The price of fresh or frozen beef was up 17.2 per cent from a year ago, while fresh or frozen pork gained 2.0 per cent.
Prices for food bought from stores was up 3.5 per cent, while food bought in restaurants was up 2.7 per cent.
MORE: Supermarkets are raising prices and ‘don’t care what you think’, experts say
Economists had expected an increase in the consumer price index of 1.4 per cent, up from 1.0 per cent in June, according to Thomson Reuters.
Costlier clothing
Clothing and footwear prices were up 1.3 per cent compared with a year ago, boosted by the cost of women’s clothing which increased in 1.2 per cent year over year, after posting a decrease in July.
Consumer prices were up in nine provinces compared with a year ago as Saskatchewan posted the largest increase compared with a year ago at 1.9 per cent. Ontario gained 1.5 per cent.
MORE: Higher consumer prices the new normal thanks to loonie’s drop
Prince Edward Island saw prices drop 0.1 per cent to post its eighth consecutive year-over-year decrease.
The Bank of Canada’s core index, which excludes some of the most volatile items, such as gas, was up 2.4 per cent from a year ago — in line with estimates.
In its monetary policy report last month, the central bank noted core inflation has been above two per cent in recent months, but attributed it to “transitory effects” including the drop in the Canadian dollar and some sector-specific factors.
The Bank of Canada estimated the underlying trend in inflation is about 1.5 to 1.7 per cent.
The central bank cut its key interest rate by a quarter of a percentage point to 0.5 per cent last month and lowered its expectations for economic growth.
WATCH: Global’s Elaine Yong takes the temperature of cross-border shoppers today.
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