Canada’s Retail Prices Jump the Most in “Over a Decade”
When Statistics Canada released its July retail sales report today, it dished out a few unwelcome surprises – and a bombshell.
Among the surprises, based on what economists – though perhaps not average Canadians – had expected: Growth in retail sales was a measly 0.5% in July; and growth in June was revised lower to 0.4%, from the originally reported 0.6%. Year-over-year, retail sales rose just 1.8% adjusted for inflation.
The saving grace, sales of auto and parts dealers rose 2% month over month. Without them, retail sales were flat – also worse than economists had expected.
And by province, there were some ugly differences: on a year-over-year basis, not adjusted for inflation – more on that in a moment – nominal retails sales jumped 5.7% in British Columbia and 4.6% in Ontario. But at the other extreme, nominal retails sales edged down 0.7% in Newfoundland & Labrador, and slumped 3.6% in Saskatchewan and 3.7% in Alberta.
These two provinces are the epicenter of the Canadian oil bust, where a deep recession has set in. Home sales are plunging. Layoffs are cascading through the local economies. Uncertainly reigns. And consumers are reacting the best they can.
And here’s the bombshell: over the last six months, retail prices have jumped at the fastest rate in over a decade.
Inflation has obviously been too low in Canada, the US, Europe, Japan, etc. Heaven and earth must be moved by central banks to raise inflation. The Damocles sword of deflation – when money gains in value rather than loses in value – is hanging over our entire civilization.
But OK, when you go shopping, this sort of scenario isn’t quite that visible. What you see are price increases, and some of them are very painful.
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