B.C inflation remains well below the Canadian average while the province had some of the country’s highest growth in retail sales, according to two separate economic reports released by Statistics Canada August 22.
In the 12 months to July, inflation grew by 1.4% in B.C., which was the lowest growth rate in the country, followed by Manitoba with 1.5%. Canada-wide, the consumer price index grew 2.1% over that period, following a 2.4% increase the previous month, which had been the highest jump in over two years.
Porter said the rate of inflation will likely drop in the near future.
“The recent dive in oil prices has taken the steam out of gasoline, even more than the usual seasonal easing in pump prices, which should help further trim headline inflation, possibly back below the key 2% threshold as soon as next month,” said Douglas Porter, BMO chief economist and managing director.
The timing for Statistics Canada’s inflation data differs by one month when compared with that for retail sales. Retail sales in B.C. jumped 7.1% to $5.6 billion between June 2013 and June 2014, led by growth in beer, wine and liquor store sales. This is second only to Alberta, where consumers increased their spending by 8.8%, due in large part to growth in sales at new car dealers.
Across the country, retail shoppers spent 5.9% more over the same period for a total of $42.6 billion, with price growth for general merchandise contributing the most to the increase.
“The overall tone of today’s double-headed release [Canada-wide] is very good news for the economy and a mixed bag for monetary policy, with retail sales hot and inflation not,” Porter said.
Avery Shenfeld with CIBC World Market Economics, said, “The offsetting messages on growth and inflation might largely cancel out in terms of the Canadian dollar, but the bond market could get a small sigh of relief on the CPI news.”
As of press time, the Canadian dollar was sitting at $0.913 – up slightly from the $0.912 seen just prior to the announcements.
