Today, Statistics Canada released their Consumer Price Index (CPI), a report which evaluates the changes in consumer prices in Canada. According to the report, inflation in the country reached historic highs in May 2019.
Canada's inflation rate rose by 2.4%, which will ultimately affect the cost of everything from food to auto parts. High inflation is partly due to the fact that food prices, in general, are quite high in Canada.
In all eight categories of the CPI, prices increased by an unprecedented amount. Food prices, for example, rose by 4% overall in one year alone. We see similar price increases in durable goods and automobiles.
Canadians will soon begin to feel the pinch at the grocery store even more than we have been. While a high inflation rate is good for banks, regular people tend to suffer the most.
Where Canadians will feel the rise in prices the most is in the cost of fresh produce. High inflation rates for food prices were driven by an overall price spike of almost 17% for fresh fruits and vegetables.
Some of you may have already seen exorbitant prices for produce at your local grocery store or farmer's market and unfortunately for the veggie-inclined, prices will continue to increase over the course of this year.
Carnivores might feel the pinch a little less, but still, the prices of meat rose by nearly 3% over the year. In fact, the inflation rate is the highest it's ever been since 2012. StatsCan implores people to realize that inflation rates are volatile and can change at any time, though.
Interestingly enough, the overall price of gasoline dipped by almost 4% over the year, despite carbon taxing across the country. The energy sector experienced a total price drop by less than 1%, yet that hasn't happened in quite some time.
A high inflation rate is good for the Canadian economy, however. The Canadian dollar jumped by about half a cent this morning following the announcement.
The Bank of Canada is also especially happy about the high inflation rate, as it means they're less likely to have to increase their benchmark interest rate.
Canadians, however, should be more concerned about food prices in the coming year. With no end in sight to the increases, it's important to budget yourself.
If you've ever wondered why food prices are steadily increasing, look at the inflation rates.
Also, what our friends down south are up to with their tariffs and whatnot really doesn't help matters...
To read more about the finer details of Canada's increased inflation rate, read this article on CBC News.
To read the official Statistics Canada Consumer Price Index, click here.