On Tuesday, Statistics Canada acknowledged that the Shopper Worth Index (CPI) measured inflation of two.5% for July. That’s down from 2.7% in June, and is the bottom inflation rate recorded since 2021.
Deceleration in headline inflation led by shelter element , 12-month % change
| CPI basket gadgets | June 2024 | July 2024 |
|---|---|---|
| All-items Shopper Worth Index | 2.7% | 2.5% |
| Meals | 2.8% | 2.7% |
| Shelter | 6.2% | 5.7% |
| Family operations, furnishings and tools | -0.9% | -0.1% |
| Clothes and footwear | -3.1% | -2.7% |
| Transportation | 2% | 2% |
| Well being and private care | 3.0% | 2.9% |
| Recreation, training and studying | 0.6% | -0.2% |
| Alcoholic drinks, tobacco merchandise and leisure hashish | 3.1% | 2.7% |
Actually, if you happen to take shelter out of the equation, we’re getting near zero inflation. And that’s important for 2 causes:
- The shelter-inflation fee (primarily a measurement of lease and mortgage bills) did come down considerably between June and July.
- Because the Financial institution of Canada (BoC) cuts rates of interest, the inflation element of the CPI will inevitably go down as Canadians can have entry to mortgages with decrease charges.
Notably, passenger automobile costs have been down 1.4% in July. Clothes and footwear was additionally down by 2.7%. Meals and fuel have been up by 2.7% and 1.9% respectively. British Columbia and New Brunswick had the best inflation fee development, whereas Manitoba and Saksatchewan had the bottom.
It’s fairly clear there’s now not an total inflation disaster in Canada. It’s now merely a house affordability situation at this level. Economists have been extensively predicting that this persevering with pattern of a downward inflation fee would clear the best way for continued interest-rate cuts within the coming months. Cash markets at the moment are predicting a 0.25% lower minimal on September 4, with a 4% likelihood that the lower shall be 0.50%. Wanting additional down the street, those self same markets are predicting there’s a 76% likelihood we are going to see a 2% lower by October of 2025.
I hope you locked in these assured funding certificates (GICs) or bonds when you could possibly nonetheless snag these excessive charges Try MoneySense’s listing of the best GIC rates in Canada, and my article on low-risk investments over at MillionDollarJourney.com.
A bullseye for Goal
Goal Company posted a giant earnings beat on Wednesday and shareholders noticed its shares improve in worth by 11.20%. The Minneapolis-based low cost retailer is the seventh-largest within the U.S.
Retail earnings highlights
All numbers are in U.S. {dollars}.
Identical-store gross sales for Goal grew 3% final quarter, after 5 straight quarters of declining gross sales. Extra purchases of discretionary gadgets like clothes have been accountable for the constructive reversal to the declining gross sales pattern.
Goal’s COO Michael Fiddelke had a really cautious tone, although. “Whereas we’ve been happy with our efficiency up to now this yr, our view of the patron stays largely the identical. The vary of potentialities and the macroeconomic backdrop in client information and in our enterprise stays unusually excessive.” And Goal CEO Brian Cornell cited value reductions and a value-seeking client as causes for elevated foot visitors within the quarter.
It was very a lot a mediocre earnings report for Lowes, although, because it beat earnings expectations decisively however lower its full-year forecast. Shares have been down by about 1% on Tuesday after the earnings announcement.
Lowe’s CEO Marvin Ellison stated shoppers have been ready for cuts in rates of interest earlier than taking up massive dwelling enchancment initiatives. As a result of 90% of Lowes’ clients are owners (versus contractors), they’re notably delicate to actions in rates of interest, he shared. Identical-store gross sales have been down 5.1% yr over yr.
