Inflation jumped 8.1% in Canada

Inflation jumped 8.1% in Canada

Consumer prices continued to rise in Canada in June 2022, where inflation reached 8.1% year over year. This is the strongest annual increase seen since January 1983, according to the latest data from Statistics Canada released on Wednesday.

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However, this result is still “lower than the consensus forecast of 8.4%,” according to analysis by Randall Bartlett, senior director of Canadian economics at Desjardins.

“At 8.1%, year-over-year price growth hit its fastest pace since January 1983, when Hall & Oats’ ‘Maneater’ was playing repeat radio. However, even at this pace, June CPI inflation was below expectations, and there are even some signs of cooling there.”

Excluding gasoline, the Consumer Price Index (CPI) increased by 6.5% year-on-year in June in Canada, surpassing the 6.3% increase recorded a month earlier. Between May and June, the CPI increased by 0.7%.

According to Statistics Canada, price increases remained broad-based, although the acceleration in growth in June was mainly due to higher gasoline prices.

Thus, seven of the eight main components increased by 3% or more. Food, for example, increased by 8.8% between June 2021 and June 2022. The other components are housing (+7.1% year-on-year), current expenses and furniture (+5.6%), clothing and footwear (+2.7%), transport (16.8%), health and personal care (3.9%), leisure (+6.2%) and beverages, tobacco and cannabis (+3%).

Year over year, Canadians paid 54.6% more for gasoline in June, after paying 48% more in May.

According to data from the federal agency, the price index for the purchase of motor vehicles also rose (+8.2%) year-on-year in June. “Demand for motor vehicles continues to outstrip supply due to the continuing shortage of semiconductor chips, putting upward pressure on prices,” he said.

Statistics Canada also notes that travel-related services cost more, due to the relaxation of public health measures and the increase in tourism. The price of airline tickets notably increased by 6.4%, between May and June 2022, while accommodation cost 49.7% more than in June 2021.

In Quebec, the CPI rose 8% year over year in June. On a monthly basis, it increased 0.7% between May and June.

The Federal Conservatives blamed the Liberals, who “continued to spend unchecked, as well as making life less affordable for Canadian families in the process.”

Although economists say the Trudeau Liberals can directly reduce inflationary pressures by cutting government spending, to the contrary, with their NDP partners, they doubled down on new spending, continued to blame global factors for inflation, while refusing to take responsibility for your internal failures. ”, they said in a statement on Wednesday morning.

While Conservatives are calling on the government to cut spending to curb inflation, New Democrats believe the government is not doing enough to help those directly affected by the cost of living.

“Inflation is not caused by workers and they should not pay the price,” Jagmeet Singh said in a statement on Wednesday.

“Rising wages is not the cause of inflation, it is excessive profits and corporate greed that drive up costs. Big supermarket chains, oil and gas companies, and big box stores are making fortunes off working families by taking advantage of global crises to justify exorbitant prices.”

Last month, Finance Minister Chrystia Freeland unveiled an $8.1 billion package of measures to help the most vulnerable Canadians fight rising costs.

Among these measures, Ms. Freeland highlighted the single $500 check provided to almost one million tenants across the country, as well as the improvement of various federal aid, such as the Canada Workers Benefit, as well as the indexation of other benefits. to inflation.

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