The pace of inflation in B.C. sped up in July on a month-to-month basis as the province’s consumer price index rose to 2.8 per cent from 2.6 per cent. The July rate was higher than the national figure of 2.5 per cent, which declined from 2.7 per cent in June and was the country’s slowest pace of inflation since March 2021.
Additionally, B.C.’s core inflation rate (which excludes food and energy), rose to 3.2 per cent from three per cent.
High shelter prices in the province continued to keep consumer price growth elevated on a year-over-year basis, although shelter inflation dropped to 6.5 per cent in July from 6.9 per cent in June. Contributing to still-elevated price growth were high costs for both rented and owned accommodations. In contrast, gasoline prices dipped for a second month, falling 4.9 per cent year over year, after a 6.1-per-cent drop in June. Similarly, energy prices declined by 2.6 per cent year over year, while transportation costs increased by one per cent.
Growth in food prices decelerated in July, with a year-over-year reading of 2.8 per cent. Goods prices increased by 0.3 per cent on a year-over-year basis. High services prices also are fuelling headline inflation in British Columbia, growing by 4.6 per cent—the pace of growth seen consistently since September 2023. Items related to recreation, education and reading posted a price decrease of 0.8 per cent while alcoholic beverages, tobacco products and recreational cannabis prices rose by 3.1 per cent.
A weaker consumer spending profile was seen in B.C., where sales were virtually unchanged at a seasonally adjusted $8.8 billion in June, despite inflation and population growth. Year-to-date unadjusted retail sales inched up just 0.3 per cent to $51.7 billion. During the same period, national seasonally adjusted sales decreased by 0.3 per cent from $65.7 billion in May to their lowest monthly sales level since August 2023. Year to date, national unadjusted sales are up 0.8 per cent, down from last month’s 1.7 per cent.
Five out of the nine subsectors in B.C. recorded lower year-over-year unadjusted June retail sales. Motor vehicle and parts dealers reported a month-over-month sales decrease of 9.5 per cent in June, bringing unadjusted sales to $2 billion—down 5.9 per cent from the same month last year. General merchandise retailers saw a monthly year-over-year gain of 2.3 per cent to $1.1 billion, while building material and garden equipment supplies dealers saw a 3.7-per-cent year-over-year increase to $574 million. Lower year-over-year sales were seen at food and beverage retailers (down 2.2 per cent to $2 billion) and gasoline stations and fuel vendors (down 6.9 per cent to $898 million).
In Metro Vancouver, seasonally adjusted retail sales rose 0.4 per cent in June, up from May’s $4.3 billion. Year over year, monthly unadjusted retail sales registered zero growth while year-to-date sales were down 1.4 per cent, compared with last month’s 1.8-per-cent increase.
Bryan Yu is chief economist at Central 1.
