Year-over-year inflation rate is the highest since October 2014.
The inflation rate reached 2.3% in March, largely due to higher gas prices and higher airline ticket costs.
As noted by the CP, “inflation was 2.2 per cent in February and 1.7 per cent in January. The March increase was the largest year-over-year move since it hit 2.4 per cent in October 2014, just as the oil-price slump was getting underway.”
The key drivers of the higher inflation rate were increases in transportation fuel costs (gas, jet fuel). Gas prices are facing higher upward pressure from expanding carbon taxes, needlessly driving up the cost.
In addition to the inflation rate numbers, Stats Canada data shows weaker retail-trade numbers, which “suggest consumers pulled back on spending.”
This is a big concern to many, since “this economy has been living on the backs of consumers and the housing market for many years now,” says CIBC economist Royce Mendes.
High debt loads are hurting consumers, and the overheated housing market will inevitably come back to earth. However, Mendes notes that investment and exports – which could provide economic strength in the absence of strong consumer spending – are not on a positive trend.
While every economic report can seem useless in isolation – and while we have good reason to doubt much of what the government reports about the economy – what matters is the trend. And that trend is not good for the Canadian economy.
A combination of collapsing investment, the burden of debt, and higher taxes is pushing our economy in the wrong direction, and the evidence of that negative trend continues accumulating.