tatistics Canada building and signs are pictured in Ottawa on Wednesday, July 3, 2019. THE CANADIAN PRESS/Sean Kilpatrick

tatistics Canada building and signs are pictured in Ottawa on Wednesday, July 3, 2019. THE CANADIAN PRESS/Sean Kilpatrick

Statistics Canada says annual inflation rose 0.7% in June as pandemic restrictions eased

Uptick follows two months of negative inflation due to pandemic

Statistics Canada says the consumer price index for June was up 0.7 per cent compared with one year ago, ending a run of negative inflation that began in April in the wake of the COVID-19 pandemic.

The consumer price index had registered two months of negative readings leading up to June, first with 0.2 per cent annualized decline in April, then a further 0.4 per cent drop in May.

The average economist estimate from data firm Refinitiv forecasted an annualized inflation rate of 0.3 per cent for the month.

The turnaround from May to June matched the fastest acceleration in the headline inflation reading since March 2011.

Fuelling the rise was an increase in clothing and footwear after two months of declines as brick-and-mortar stores were closed due to COVID-19.

Gasoline prices edged up as more people were on the road after businesses and public services gradually reopened, and what the agency called a general increase in local travel during June.

READ MORE: Mortgage defaults after COVID-19 could look different than 2008, says economist

Statistics Canada says that excluding gasoline, the consumer price index rose 1.2 per cent in June.

CIBC senior economist Royce Mendes says the increase in business activity across the country as restrictions ease led to a rebound in prices. In a note, he says inflation should remain in positive territory as the economy continues to reopen.

“While any fears of deflation appear premature at this point, the economy will likely only be generating modest rates of inflation even with some supply-chain disruptions,” he writes.

The Bank of Canada forecast last week that annual inflation will be 0.6 per cent this year and vowed to maintain its key interest rate at the effective lower bound of 0.25 per cent until inflation hits its two-per-cent target.

Statistics Canada reports that mortgage interest costs fell for the second consecutive month, this time by 0.3 per cent, partly due to declining bond yield and the central bank’s rapid rate cut in March.

The agency says prices rose the most in Alberta compared to June 2019 when commodity prices fell and the provincial government eliminated a carbon tax. Year-over-year price growth was the weakest in the Atlantic provinces, held down by low prices for furnace fuel oil that is more commonly used in the region.

In Ontario, electricity prices rose 17.2 per cent on a month-over-month basis, the largest monthly increase since May 2003, Statistics Canada says. The agency attributes the change to higher prices kicking in June 1 in the province after the Ford government reduced fees in March as people were ordered to stay home to slow the spread of COVID-19.

Shifts in consumer behaviour have thrown off the headline consumer price index, which Statistics Canada said would have shown annualized readings of 0.0 per cent in April and -0.1 per cent if it better reflected pandemic spending.

The agency did not include an inflation reading under the experimental price index Statistics Canada created with help from the central bank.

The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

economy

Just Posted

Tracy Haddow, executive director of 100 Mile District Hospice Palliative Care Society, shows off one of the two suites that will become a private space for palliative care patients. (Kelly Sinoski photo, 100 Mile Free Press).
Grieving during pandemic requires extra support

Restrictions to gathering, visiting ill loved ones make for a challenging grief journey

Cameron McSorley rests his arm on the new seed exchange set up in the 100 Mile Community Garden. McSorley thinks the exchange is a great idea and is hopeful it will become a permanent part of the garden. (Patrick Davies photo - 100 Mile Free Press)
Community invited to swap seeds

Gardeners who care for the 100 Mile Community garden are planting a new idea for area residents

Richard Bergen loves living and volunteering in Forest Grove. (Patrick Davies photo - 100 Mile Free Press)
Hear me roar: volunteer takes on Forest Grove

If something needs doing around Forest Grove, chances are Richard Bergen is already on it

Staff-Sgt. Svend Nielsen, with the 100 Mile House RCMP. (Melissa Smalley - 100 Mile Free Press)
14-year-old boy killed in serious ATV crash near 100 Mile House

Youth was travelling with a group of peers when the incident occurred Friday

Daily confirmed COVID-19 cases reported to B.C. public health, seven-day rolling average in white, to May 12, 2021. (B.C. Centre for Disease Control)
B.C. preparing ‘Restart 2.0’ from COVID-19 as June approaches

Daily infections fall below 500 Friday, down to 387 in hospital

A vial of AstraZeneca vaccine is seen at a mass COVID-19 vaccination clinic in Calgary, Alta., Thursday, April 22, 2021. Dr. Ben Chan remembers hearing the preliminary reports back in March of blood clots appearing in a handful of European recipients of the Oxford-AstraZeneca COVID-19 vaccine. THE CANADIAN PRESS/Jeff McIntosh
Science on COVID, VITT constantly changing: A look at how doctors keep up

While VITT can represent challenges as a novel disorder, blood clots themselves are not new

Poached trees that were taken recently on Vancouver Island in the Mount Prevost area near Cowichan, B.C. are shown on Sunday, May 10, 2021. Big trees, small trees, dead trees, softwoods and hardwoods have all become valuable targets of tree poachers in British Columbia as timber prices hit record levels. THE CANADIAN PRESS/Jen Osborne.
Tree poaching from public forests increasing in B.C. as lumber hits record prices

Prices for B.C. softwood lumber reached $1,600 for 1,000 board feet compared with about $300 a year ago

The warm weather means time for a camping trip, or at least an excursion into nature. How much do you know about camps and camping-related facts? (John Arendt - Summerland Review)
QUIZ: Are you ready to go camping?

How many camp and camping-related questions can you answer?

On Friday, May 14 at Meadow Gardens Golf Club in Pitt Meadows, Michael Caan joined a very elite club of golfers who have shot under 60 (Instagram)
Crowds at English Bay were blasted with a large beam of light from an RCMP Air-1 helicopter on Friday, May 14. THE CANADIAN PRESS/Marc Grandmaison
Police enlist RCMP helicopter to disperse thousands crowded on Vancouver beach

On Friday night, police were witness to ‘several thousand people staying well into the evening’

People shop in Chinatown in Vancouver on Friday, February 5, 2021. THE CANADIAN PRESS/Jonathan Hayward
Vancouver community leaders call for action following 717% rise in anti-Asian hate crimes

‘The alarming rise of anti-Asian hate in Canada and south of the border shows Asians have not been fully accepted in North America,’ says Carol Lee

Sinikka Gay Elliott was reported missing on Salt Spring Island on Wednesday, May 12. (Courtesty Salt Spring RCMP)
Body of UBC professor found on Salt Spring Island, no foul play suspected

Sinikka Elliott taught sociology at the university

The first Black judge named to the BC Supreme Court, Selwyn Romilly, was handcuffed at 9:15 a.m. May 14 while walking along the seawall. (YouTube/Screen grab)
Police apologize after wrongly arresting B.C.’s first Black Supreme Court Justice

At 81 years old, the retired judge was handcuffed in public while out for a walk Friday morning

Most Read