Articles, Blog

Carrick Talks Money: Is Canada returning to an ‘inflation nation’?

You may not know this, but the average
annual inflation rate in Canada over the last 50 years is about 4 per cent, or a little higher than that.
Since the financial crisis back in 08-09 we’ve averaged about 1.6 per cent.
The economy’s in kind of a rut and it’s really not generating that much
inflation. But people don’t really trust the overall inflation numbers. They say,
“In my life, I’m seeing inflation that goes beyond that 1.6 per cent number.
What’s really going on here?” Well, one thing is that there is definitely
inflation in little pockets of the economy. Food is one area. There’s a team
at Dalhousie University that tracks food prices and they say that food inflation
over the first half of the year was north of five per cent. They singled out
meat prices up about 11 per cent from January through mid-May. Now, part of that might be
the advent of barbecue season but nevertheless, that is a big price
increase. Cars are also going up in price. About 4.2 per cent year-over-year,
2016 versus 2015. Perception is part of the problem here.
A Statistics Canada report says that we tend to overemphasize the impact of things we
buy frequently and ? compared to things we buy infrequently. And as it happens
things like gas and food, that we buy all the time, tend to show higher inflation
rates than big-ticket items we buy once in a while, like furniture, computer
equipment and clothing. Looking ahead I think it’s safe to say
that inflation could be more of an issue than it has been. The Bank of Canada recently warned
that the economy is improving enough to warrant higher interest rates. That means
the bank is worried about inflation and wants to head it off at the pass. For the
average individual out there it means look for higher inflation to come.

Tagged , , , , , , , ,

1 thought on “Carrick Talks Money: Is Canada returning to an ‘inflation nation’?

  1. Its ironic that the cause of the Canadian dollars deflation is low Oil prices and the only thing that should be cheap is gas but inflation has brought it back to its original price.

Leave a Reply

Your email address will not be published. Required fields are marked *