OTTAWA-Strength in the auto sector helped push up Canada’s wholesale sales in June by 1.3 per cent to $55.3 billion, Statistics Canada reported Thursday.
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“However, [the effect of lower energy prices overall] has moderated through the past three months, as the effects of past price movements work their way through the index”.
With the data from July, inflation in the country has now been equal to or above the 2% for the past 12 months, which is the first time that has happened in close to eight years.
Output probably rose by as much as 0.2 percent in June, and it’s questionable how much consumers can contribute after that, said Benjamin Reitzes, a senior economist at BMO Capital Markets in Toronto.
Clothing and footwear were up 1.3 percent.
Moreover, consumer prices are on the rise in every province except Prince Edward Island.
“We look for core to stay stuck above 2% well into the next year as the sagging Canadian dollar pressures plenty of other prices”, said Douglas Porter, chief economist, BMO Financial Group. “Many small firms are benefitting from the continued fall in oil prices and increased consumer spending”.
Reuters noted that core CPI, which excludes volatile items such as food and energy, rose by only 0.1 in July due largely to decline in airfare prices.
Inventories edged up 1.1 percent to hit a record high, with gains registered in six of seven subsectors.
What has changed is the oil price drop fueling concerns over the ability of the Canadian economy to rebound in the second half of this year, as projected by the Bank of Canada.
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The Bank of Canada put its benchmark interest rate to maintain a rate of inflation of 2%.
