Statistics Canada says wholesale sales rose 1.3 per cent to $55.3 billion in June. For all food at home, the July index was 242, up 0.9% from July 2014.
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Thanks to Canada’s 1.3 per cent inflation bump since last July, with a one per cent increase in June alone, the cost of putting food on the table is becoming virtually unaffordable. Statscan revised May’s month-on-month fall to 0.9 percent from an initial decline of 1.0 percent.
The statistics agency also said the inflation rate quickened to 1.3 percent in July from a year earlier, compared with 1 percent in June. Year-over-year, energy costs were down 7.4%. The only province to see prices contract was Prince Edward Island, where the CPI fell 0.1%. Economists surveyed by Bloomberg News forecast a 0.2 per cent increase, based on the median of 20 projections.
The report follows gains in manufacturing, wholesaling and exports, and means the five-month streak of shrinking output may end when Canada reports gross domestic product data for June on September 1, said Nick Exarhos, an economist at CIBC World Markets.
“It is still likely the case that the next move by the Bank of Canada will be more influenced by near-term economic growth“, Ferley said.
In the near term, household spending can be expected to pick up, as Canadian families spend the windfall received from the federal government in the form of enhanced Universal Child Care Benefit payments.
“We expect the lump-sum payment received in July to contribute about 0.4 percentage points to annualized real GDP growth in [the third quarter], with the effect fading thereafter”.
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So the question is whether such additional easing is actually needed, with the BOC having made clear that even at such low levels of interest rates, it does have the tools and the room to maneuver. Republication or redistribution of content provided by EconoTimes is expressly prohibited without the prior written consent of EconoTimes, except for personal and non-commercial use.
