Tag Archive for: Consumer price index

CPI update for June 23

Well the CPI ( Consumer price index) numbers are out for the month and it has been reported that inflation for May has gone down a full percentage point from 4.4% to 3.4%. This has been the biggest monthly change since the inflation hit the peak of 8.1% in June of 2022, and the lowest rate since June of 2021. So it now give me some confidence that we will soon hit that 2% target.

The slowing of inflation in May, led by a significant drop in gasoline prices, according to Statistics Canada. The deceleration was down from 4.4% last month, with gasoline prices being the key factor in the data. Removing gasoline, the inflation rate was 4.4%. Despite the slowdown, many facets of living costs are still increasing sharply, such as grocery prices, which rose almost 9% in May, and the cost of housing, with mortgage interest costs skyrocketing to a record 29.9% increase. Shelter costs rose 4.7%, and rent increased by 5.6% in the past year.

The decline was largely due to base year effects from the impact of Russia’s invasion of Ukraine on international energy prices. The result was in line with the Bank of Canada’s baseline scenario, which expects inflation to slow to 3% by summer. The slowdown was attributed to a decline in energy prices, particularly gasoline, and eased supply chain bottlenecks for durable goods. However, mortgage interest costs saw the sharpest hike in history, driven by the high interest of the Bank of Canada. The core inflation rate also slowed more than expected to 3.7%. On a monthly basis, the CPI rose 0.4%.

The next up in this economic chess match will be the Bank of Canada’s next policy meeting on July 12th. Despite the decrease, some economists are warning that the Bank of Canada may still raise interest rates again in July. While the cooling in inflation may ease the pressure on the bank, more information is needed to determine the effect of inflation, with June’s job data and the Bank’s own business outlook survey among the metrics to be considered. Let’s take today’s good news with a grain of salt.

Today I am thankful for some pleasing economic news, a great early morning run and a new book discovered hidden away in my house.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

May Inflation Rate

The May inflation rate has just set a record that we have not seen since 1983, which was a rate of 7.7%. Up almost a full percentage point since last month when it was 6.8%. Yes we expected it to be above 7% but not by this much.

The biggest contributor to the increase was the price of gas, which was up 48% compared to a year ago. Increased fuel costs put upward pressure on so many things from food, flights, lumber and any other product that gets shipped is now up as a result.

The next step to help cool the sky high inflation is for the Bank of Canada to increase the rates again. The next meeting is in July and this what I fully expect them to do. The US federal reserve recently announced an oversized rate increase of 75 basis points and this is not out of the realm of possibility for the Bank of Canada at the next meeting.

So what do you do if you are still on a variable rate mortgage. Well the fixed rates have now risen to a point well above the current variable rate and the rate for a 5 year terms is now above 5%, starting at 5.09%. With prime currently at 3.70 and most people at prime -1%, so even if prime increases by 75 basis points the smart at math say to just ride it out and that is what I am going to do. You may decide differently that that is up to you.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

New Record

The consumer price index ( how we track inflation) hit a 31 year high for the month of April at 6.8%. Up .1% from March. The increase is a result of higher food and housing costs. The causes of this stem from the war in Ukraine and supply chain disruptions in China due to Covid. While global crude oil prices declined in April, they have vastly increased in May so we may be in for another record for the May report.

As a result of the record high CPI we are pretty much guranteed for another Bank of Canada rate increase when they meet next on June 3rd. What we don’t know is if it will be another 50 basis points like the last time or just 25 basis points like the first increase we had earlier this year.

So while the costs of everything in life has been steadily rising, the wages that we are getting paid is not keeping up with the high costs of living. They did go up 3.3% as compared to last year but this is still not keeping pace with the costs to keep food on the table so sooner or later something will have to give.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here