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Inflation slowed on decrease fuel costs in August, however price of meals nonetheless surging – Nationwide


The annual price of inflation slowed to 7.0 per cent in August as costs continued to fall on the fuel pumps, Statistics Canada reported Tuesday.

Whereas fuel costs had been 22 per cent larger year-over-year in August they had been down 9.6 per cent on a month-to-month foundation, in accordance with the newest Shopper Worth Index (CPI) launch. This marks the most important month-to-month decline since April 2020.

The nation’s year-over-year inflation price had beforehand slowed in July to 7.6 per cent, additionally largely attributable to decrease fuel costs.

Click to play video: 'New study shows rising food costs affecting shopping habits'

New examine reveals rising meals prices affecting procuring habits

New examine reveals rising meals prices affecting procuring habits

However August’s figures noticed aid past the pumps: annual inflation excluding fuel costs was 6.3 per cent for the month, down from 6.6 per cent in July. That’s the primary slowdown in CPI excluding fuel since June 2021.

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Statistics Canada reported that shelter costs had been up 6.6 per cent in August, representing a slowdown in worth progress.

The August inflation print was decrease than most economists anticipated; a Reuters ballot of analysts final week referred to as for annual CPI to rise 7.3 per cent year-over-year.

Common hourly wages, in the meantime, had been up 5.4 per cent year-over-year in August, nonetheless lagging inflation.

Rampant meals inflation altering how Canadians are procuring

Tuesday’s report wasn’t all excellent news — grocery costs had been up 10.8 per cent over August 2021, the quickest tempo recorded since 1981. Final month noticed huge year-over-year jumps in costs for baked items (up 15.4 per cent); condiments, spice and vinegars (up 17.2 per cent); non-alcoholic drinks (up 14.1 per cent); and contemporary fruit (up 13.2 per cent).

The company cited excessive climate, larger enter prices, disrupted world provide chains and Russia’s warfare in Ukraine as elements driving meals costs larger.

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A survey launched Tuesday from the Agri-Meals Analytics Lab at Dalhousie College reveals round three-quarters of Canadians have been altering how they do their groceries not directly as excessive prices eat away at their budgets.

Click to play video: 'Supermarket inflation or ‘greedflation’?'

Grocery store inflation or ‘greedflation’?

Grocery store inflation or ‘greedflation’? – Sep 2, 2022

The ballot, carried out by Caddle, confirmed roughly 24 per cent of respondents are reducing again the quantity of meals they’re shopping for attributable to excessive costs. That determine was even larger amongst girls respondents, at 29.6 per cent.

From the 5,000 Canadians surveyed, 7.1 per cent stated they’re skipping meals or snacks due to meals inflation. Some 6.6 per cent stated they’re extra usually paying for groceries on their bank cards with out understanding once they’ll be capable of pay it again.

Sylvain Charlebois, director of the Agri-Meals Analytics Lab, informed International Information in an interview that the survey reveals the “darkish aspect of meals inflation.”

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“Our newest report that reveals that lots of people on the market are struggling, like actually struggling,” he says.

Forty per cent in the meantime stated they had been making an attempt to waste much less meals amid excessive inflation, 33 per cent stated they had been paying for groceries utilizing rewards factors extra usually and 18 per cent stated they’re shopping for meals in bulk extra usually.

Click to play video: 'Calgary startup hoping to stabilize grocery prices as food inflation soars'

Calgary startup hoping to stabilize grocery costs as meals inflation soars

Calgary startup hoping to stabilize grocery costs as meals inflation soars

When meals inflation topped 10 per cent again within the Eighties, the upper costs solely lasted a number of months and didn’t see Canadians undertake new procuring habits en masse, Charlebois says.

He factors to the steps taken to scale back meals waste as one instance of the shifting mindsets across the prices of groceries.

Learn extra:

Larger grocery costs have Canadians feeling confused about cash

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“Individuals are really linking meals waste, what they put of their bin, with cash wasted. And that’s a very good signal,” he says.

With meals inflation proving stickier at present than within the Eighties, Charlebois expects much more households might be pushed to make long-term adjustments for the way they store.

“We’re not out of the woods but. So we predict extra Canadians to to undertake new habits as we attempt to get out of this meals inflation dilemma,” he says.

What does this imply for the Financial institution of Canada’s price hikes?

So-called “core inflation” — a metric that economists use to trace the underlying worth pressures driving inflation — additionally noticed a modicum of aid in August.

The common of the three figures Statistics Canada makes use of to trace core inflation dipped barely to five.2 per cent final month after hitting an all-time excessive in July.

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Learn extra:

What’s ‘core inflation’? This key determine may gauge future rate of interest hikes

Economists who spoke to International Information on Monday stated core inflation is likely one of the key measures the Financial institution of Canada will watch to find out how excessive rates of interest have to go. The central financial institution has thus far raised rates of interest 300 foundation factors in 2022, placing its benchmark price at 3.25 per cent at present.

CIBC senior economist Andrew Grantham stated in a be aware Tuesday morning that the modest let up in inflation doesn’t imply the central financial institution is within the clear but.

“Even after at present’s deceleration, the annual price of inflation stays effectively above the Financial institution of Canada’s goal and as such additional rate of interest hikes are nonetheless within the playing cards,” he wrote.

Click to play video: 'What the Bank of Canada’s interest rate hike means for you'

What the Financial institution of Canada’s rate of interest hike means for you

What the Financial institution of Canada’s rate of interest hike means for you – Sep 8, 2022

Cash markets bets on a 50-basis-point hike on the October price resolution eased barely following the info, Reuters reported Tuesday, although the bigger transfer was nonetheless favoured over a normal quarter-percentage-point improve.

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Benjamin Reitzes, BMO’s managing director of Canadian charges and macro strategist, wrote Tuesday that whereas the decline in each headline and core inflation is a “clear constructive,” the report didn’t present a lot aid within the breadth of worth progress.

He added that Tuesday’s figures are “nearly as good of an inflation report we are able to hope for” — particularly given a excessive inflation print out of the U.S. final week — that can “restrict” how a lot larger the market expects rates of interest to go.

“The trail to tamer inflation goes to be lengthy and winding, and this can be a step in that course,” Reitzes stated.

TD Financial institution’s managing director and senior economist Leslie Preston additionally stated there’s a “lengthy journey forward” in her be aware Tuesday morning. She stated that the Financial institution of Canada will nonetheless be on track for a price hike in October, with the coverage price anticipated to hit 4 per cent by the top of the yr.

— with recordsdata from International Information’s Anne Gaviola, the Canadian Press, Reuters

Click to play video: 'Canada’s affordability plan won’t contribute to rising inflation: Boissonnault'

Canada’s affordability plan gained’t contribute to rising inflation: Boissonnault

Canada’s affordability plan gained’t contribute to rising inflation: Boissonnault

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