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Price inflation moves higher

Price inflation moves higher

Posted on: 8/17/2018 | Author: ATB Financial's Economics + Research Team

​​The price of goods and services is rising at a much faster rate than many Albertans would like. Price inflation—the rate at which the price for goods and services moves—clocked in at 3.5 per cent last month. This is slightly above the national average of three per cent and higher than Canada’s inflation-control target of two per cent.

The highest price movement for a single group of goods in July was energy, which likely comes as no surprise to Alberta motorists. Compared to the same time last year, total energy prices have grown a whopping 25 per cent. This category includes electricity, natural gas, fuel oil and gasoline.

Every category registered price gains from a year ago except one. Fruits and vegetables was the only category to not show price increases last month (-0.3 per cent). This is particularly surprising. Alberta imports a fair amount of fresh produce and, with a softer Canadian dollar, trade has become more expensive.

A higher rate of inflation is almost never a good thing for the consumer. It means your money is worth less, in that the same dollar doesn't buy you as much as it once did. But, as a whole, inflation can be good for the economy. A healthy inflation rate—one that’s bound between one and three per cent—ensures stability, encourages competition and instills confidence among businesses and consumers.

Consumer Price Index, graph

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