The cost of food in Canada experienced a 3.2 per cent increase in only one year, following a 3.4 per cent increase in June.
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“It is not inconsistent with the view that we’re sort of through the worst of that (first half) contraction”.
The July index for Cereals and Bakery Products before seasonal adjustment was 275.5% of the 1982-84 average, up 1.3% from a year ago.
“The ONS state that ”a smaller fall in clothing prices on the month compared with a year ago was the main contributor to the rise in inflation”.
The annual pace of inflation increased to 1.3 per cent in July, driven by the higher cost of food and most other categories of consumer items, Statistics Canada reported Friday.
In volume terms, wholesale sales rose 1.1% in June.
However, on a year-over-year basis sales remained down by 5.8 per cent.
Stats Can said that growth was driven by stronger sales of phones and home office electronics, which the agency said coincided with new rules that limited the duration of cellphone contracts.
But the 2.4% rate is unlikely to prevent a further easing should the BOC deem it necessary, given that the underlying trend is below the 2.0% mid-range target in its view. The agricultural supplies industry (-5.5%) contributed the most to the decline, recording its second consecutive decrease.
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 declines were largely the result of gasoline prices, which were 12.2% lower than 12 months ago”, TD Economics’ Brian DePratto said in a note to investors.
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Inventories increased for the sixth time in seven months in the machinery, equipment and supplies subsector (+0.7%) and for the fourth time in six months in the motor vehicle and parts subsector (+1.3%).
