The Consumer Price Index (CPI) increased 0.1% on a year-over-year basis, reported Statistics Canada. This marks a decrease from the 0.7% rise seen in June. Excluding the index for gasoline, the CPI increased by 0.7%. In July, the CPI dropped 0.1% on a seasonally adjusted monthly basis.
“The CPI grew at a slower pace than in June as a result of a broad-based slowdown in price growth, spanning both goods and services,” explained Stats Can.
Overall, prices increased in five of the eight major component indexes in July.
Air Transportation Index
According to data collected by Statistics Canada, the transportation component saw the slowest growth, largely due to the decrease in the air transportation index. Prices for air transportation dropped 8.6%, which marked the first year-over-year decrease since December 2015, reported Statistics Canada.
Additionally, traveller accommodation plummeted 27% since this time last year.
Gasoline Index
Over the 12-month period, the price of gas plunged 14.9%. This marks the fifth consecutive year-over-year price drop in the gas.
“Although gasoline prices rose 4.4% on a monthly basis amid the reopening of many businesses and services, crude oil prices increased minimally in July due to concerns that surging coronavirus infections around the world could jeopardize a recovery in fuel demand. This followed several months of volatile monthly price movements related to changes in demand for gasoline during the COVID-19 pandemic,” explained Statistics Canada in their report.
Food Index
Within the index for food, meat prices increased at a slower rate over the last 12-month span in July (4.8%). Specifically, the price of both fresh and frozen beef dropped by 6.7%, month-over-month.
“The decrease in beef prices marked the largest monthly decline since August 2003. Beef prices fell as production increased, gradually returning to pre-COVID-19 production levels,” stated Stats Can.
Statistics Canada has been conducted research over the course of the COVID-19 pandemic. The agency released a statement regarded the compiled data.
“For more information about the impact of COVID-19 on the CPI, please consult the research document entitled ‘Consumer expenditures during COVID-19: An exploratory analysis of the effects of changing consumption patterns on consumer price indexes,’ released on July 13, which explores new sources of expenditure data to estimate basket weights that reflect shifting consumption patterns during the pandemic. For more information on consumer expenditures during COVID-19, users can consult two available documents. The first is ‘Canadian Consumers Prepare for COVID-19,’ released on April 8, which examines the shifting consumption patterns of Canadians during the COVID-19 pandemic up to March 14. The second is ‘Canadian Consumers Adapt to COVID-19: A Look at Canadian Grocery Sales up to April 11,’ released on May 11, which explores a continued shift in the consumption patterns of Canadians during the COVID-19 pandemic up to April 11. All of the above publications can be found in the Prices Analytical Series (62F0014M).”
Source cited: https://www150.statcan.gc.ca/n1/daily-quotidien/200819/dq200819b-eng.htm
Sarah has been writing on the topics of politics, history and finance for over a decade. She is currently an editor at CPI Inflation Calculator, covering the topics of CPI, inflation, US economy and economic commentary.
