Inflation dips, but experts wary of celebrating just yet
While Canada and Alberta's inflation rates have dropped from a record-high peak seen in June, not all consumer prices are falling with it.
While the price to gas up your vehicle may have dropped, groceries continue to be more expensive than last year, and experts say the market is so volatile it wouldn't take much to send prices back up.
Canada's year-over-year inflation rate dropped from a four-decade peak of 8.1 per cent in June to 7.6 per cent in July, while Alberta's rate dipped from 8.4 per cent in June to 7.4 per cent in July, according to ATB Economics.
"It's too early to say that this is a downward trend,“ said Rob Roach, deputy chief economist for ATB Financial. "We hope that it is, and there's some signs that it'll continue, but I think we're going to continue to see high rates of inflation for least the next few months, if not longer."
Alberta's average price at the pumps has come down from a peak of $1.90 per litre in early July to about $1.50 per litre, according to GasBuddy.com.
Prices for West Texas Intermediate, the benchmark for crude oil, are down 30 per cent in two months, closing Tuesday at $86.53.
Market analysts say that factors and trends affecting the commodity markets, refineries and gasoline retailers are expected to continue downward, but conditions are highly unstable.
"The market is so fragile, demand and supply just close to each other. Given that, if everything goes normal, you can see this decrease in price going forward. But if there was a supply disruption, we will see prices come back to $100 per barrel easily. Because the market is very tight," said Vijay Muralidharan, managing director of R Cube Economic Consulting Inc.
He adds the end of the driving season in early October should also cause a further drop in gas prices.
A majority of food items are about 10 per cent more expensive than last year.
Statistics Canada has reported that eggs are nearly 16 per cent more expensive compared to July 2021, baked goods are up 13 per cent, and fresh fruits are also up 11 per cent.
Agri-food experts say it will take longer for prices to drop -- because profit margins for grocery retailers are often very slim.
"Grocers and anyone else involved in the food industry are very careful when protecting margins, and that's why you don't necessarily see prices drop. In fact, I don't believe that prices will be dropping anytime soon, because of that reality," said Sylvain Charlebois, director, agri-food analytics lab at Dalhousie University.
He says he is optimistic that slowing inflation could slowly translate to lower grocery bills.
"The fact that we're not looking at a at an increasing food inflation rating means that companies will be able to afford the time to plan for promotions and discounting," said Charlebois.
Inflation is still much higher than the Bank of Canada's target of two percent inflation.
On Tuesday the governor signalled publicly that another interest rate hike is likely to try to lower demand for borrowing and spending.
The next interest rate announcement is on Sept. 7.
CTVNews.ca Top Stories
BREAKING Alice Munro, Nobel literature winner revered as short story master, dead at 92
Nobel laureate Alice Munro, the Canadian literary giant who became one of the world's most esteemed contemporary authors and one of history's most honoured short story writers, has died at age 92.
Latest updates on air quality alerts, and when the smoke may reach Ontario and Quebec
Wildfires have led Environment Canada to issue air quality advisories for parts of B.C., Alberta, Manitoba, Saskatchewan and the Northwest Territories, as forecasters warn the smoke could drift farther east.
Are these Canada's best restaurants? Annual top 100 list revealed
The annual list of Canada's top restaurants in the country was just released and here are the places that made the 2024 cut.
Attack on prison van in France kills 2 officers, inmate escapes
Armed assailants killed two French prison officers and seriously wounded three others in an attack on a convoy in Normandy on Tuesday and an inmate escaped, officials said.
Maximum payout for LifeLabs class-action drops from $150 estimate to $7.86
Canadian LifeLabs customers who filed an application for a class-action settlement began receiving their payments this week, though at a much lower amount than initially expected.
Steal a car, lose your driver's licence for 10 years under new Ontario proposal
Repeat car thieves may face lengthy licence bans under proposed changes to Ontario’s Highway Traffic Act.
$1.6B parts plant for Honda electric vehicle batteries coming to Niagara Region
A Japanese company has announced it will build an approximately $1.6-billion plant in Ontario's Niagara Region that will make a key electric vehicle battery component as part of Honda's supply chain in the province.
B.C. brings in law on name changes on day that child killer's new identity revealed
The BC NDP have tabled legislation aimed at stopping people who have committed certain heinous acts from changing their names.
Manitoba premier to visit areas impacted by wildfire
Manitoba Premier Wab Kinew will get a close-up look at the devastation from a large wildfire burning in northern Manitoba Tuesday.