Steve Flynn  RE/MAX Crest Realty- Burnaby 

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Canadian Inflation (July 2022) - August 16, 2022


Canadian prices, as measured by the Consumer Price Index (CPI), rose 7.6 per cent on a year-over-year basis in July, down from 8.1 per cent last month. The deceleration was driven by declining gasoline prices, but price growth remains high among other components of the index. Excluding gasoline, the CPI rose 6.6 per cent year over year in July, up from 6.5 per cent in June. Month-over-month, on a seasonally-adjusted basis, prices were up 0.1 per cent, the slowest rate since December. In BC, consumer prices rose 8 per cent year-over-year, up from 7.9 per cent last month. Average hourly wages grew 5.2 per cent year-over-year in July, indicating a decline in purchasing power. 

July's CPI numbers provided some encouraging signs that inflation may be slowing, particularly in combination with a flat month-over-month data point in the United States for July. However, markets will want to see sustained declines in the rate of inflation over the next several months before mortgage rates decline significantly. Certain bond yields have been softening in recent weeks, but so far this hasn't translated substantially into mortgage rates. Markets are still expecting an aggressive Bank of Canada, singularly focused on bringing inflation back to its 2 per cent target.



Copyright British Columbia Real Estate Association. Reprinted with permission.


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