The Consumer Price Index (CPI) rose 2.5% on a year-over-year basis in July, increasing at the slowest pace since March 2021 and down from a 2.7% gain in June 2024, according to a report released Tuesday by Statistics Canada.
“Deceleration in headline inflation was broad-based, stemming from lower prices for travel tours, passenger vehicles and electricity. On a monthly basis, the CPI rose 0.4 per cent in July, after falling 0.1 per cent in June. Gasoline prices increased month over month in July (+2.4 per cent), putting upward pressure on the monthly CPI figure. On a seasonally adjusted monthly basis, the CPI rose 0.3 per cent in July,” said the federal agency.
StatsCan said that year over year, gasoline prices rose at a faster pace in July (+1.9 per cent) compared with June (+0.4 per cent). Prices accelerated the most in the Prairie provinces, partially attributable to reduced supply amid a refinery shutdown in the Midwestern United States.
Year over year, prices for shelter rose at a slower rate in July (+5.7 per cent) compared with June (+6.2 per cent), with downward pressure coming from the electricity; mortgage interest cost; rent; and fuel oil and other fuels indexes, it said.
Andrew Grantham, Senior Economist with CIBC Capital Markets, said Canadian inflation continued to ease in July, keeping the door to further interest rate cuts wide open.
“Core measures of inflation were fairly subdued in July, with ex-food/energy prices up only 0.2 per cent on a seasonally adjusted basis (even with mortgage interest costs still advancing) and CPI-trim and CPI-median both advancing by a slight 0.1 per cent m/m. With inflationary pressures fading away but concerns about the weakening labour market growing, we continue to forecast three further 25 (basis point) cuts by the Bank of Canada at the remaining meetings this year.”
As a real estate agent, the news of easing inflation in Canada is a breath of fresh air. It signals a potential shift in the market, with the possibility of lower interest rates on the horizon. This could stimulate buyer activity, as borrowing costs become more manageable. While the market is still adjusting, it’s encouraging to see positive signs that could lead to a more balanced landscape for both buyers and sellers. It’s a good time to stay informed and proactive, as we navigate this evolving market together.