It appears that prices in Canada have grown at a relatively low pace amid the coronavirus pandemic, as the consumer price index only rose by a mere 0.1% year-over-year in July.
In June, CPI increased by 0.7%, which compared to the latest July data released by Statistics Canada, is a relatively slower pace given the slowdown of price growth. Out of the eight major components that the CPI is comprised of, July’s price growth was evident in only five categories.
Prices dropped in air transportation by 8.6% – the first decline in over 5 years. The resulting decrease is due to many flights being suspended or cancelled, as well as airlines offering promotions to incentivize travelers. Likewise, the traveler accommodation category was also the subject of falling prices, as many Canadians opted to spend holidays close to home. In addition, low crude oil prices and airline fuel prices were also a factor in hindering price growth for both categories.
Moreover, this is the fifth consecutive year that gasoline prices have fallen on a year-over-year basis. Fuel prices declined by 14.9% in July, after falling by 15.7% in June. Crude oil prices only increased by a fraction given the mounting concerns over a demand recovery amid the continued increase in coronavirus infections worldwide.
With respect to regional highlights, prices increased in only five provinces across Canada in July. The country’s Atlantic provinces were the subject of price declines, while both Alberta and Saskatchewan both saw the largest increases relative to the rest of Canada.
Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.