Annual inflation rate Rises 3.7% in July

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The Consumer Price Index (CPI) rose 3.7% on a year-over-year basis in July, up from a 3.1% gain in June, the biggest increase since May 2011, Statistics Canada said on Wednesday.

Prices rose at a faster pace year over year in six of the eight major components in July, with shelter prices contributing the most to the all-items increase. Conversely, prices for clothing and footwear as well as alcoholic beverages, tobacco products, and recreational cannabis slowed on a year-over-year basis in July compared with June.

Gasoline prices, for instance, rose by 30.9 per cent compared with July 2020 when many businesses and services started to reopen after the first wave of COVID-19.

The homeowners’ replacement cost index, which is related to the price of new homes, continued to trend upward, rising 13.8% year over year in July, the largest yearly increase since October 1987.

Similarly, the other owned accommodation expenses index, which includes commission fees on the sale of real estate, was up 13.4% year over year in July.

Year-over-year price growth for goods rose at a faster pace in July (+5.0%) than in June (+4.5%), with durable goods (+5.0%) accelerating the most. The purchase of passenger vehicles index contributed the most to the increase, rising 5.5% year over year in July. The gain was partially attributable to the global shortage of semiconductor chips.

Prices for upholstered furniture rose 13.4% year over year in July, largely as a result of lower supply and higher input costs. The introduction of tariffs on upholstered furniture, first implemented in early May 2021, may also have contributed to the increase.

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