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Good News and Bad News On Inflation

Inflation Hero
The headline news continues to improve on inflation. Perhaps the worst is over, as today the headline rate dropped to an optimistic 3.1%... getting close the official target range of one to three percent annual inflation.

But I often hear from people that this isn’t realistic, and inflation still feels very high. I agree – and Statistics Canada allows us to dive into the nitty-gritty of inflation. Not just broad categories like ”food” or ”shelter” but individual components like fruit, books, shoes and property taxes.

As you can see many essentials are still rising dramatically. Look at the list and it’s not luxuries: peanut butter, cooking oil, spaghetti, housing. We all know the situation with borrowing costs for housing but there’s a lot more going on under the hood. Netflix raised prices 65% this year; minimum wage in Mexico (source of a lot of fruit) rose 20% this year; the Canadian dollar has dropped 12% since 2021 which makes imports more expensive. While gas, home furnishings and clothing declined, many household costs are still growing at a concerning level. 

Inflation Graph

Summary
Headline inflation declined and seems close to returning to normal, but many essential components like food and housing remain stubbornly high.


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Adam Jacobs

Head of Research | Canada

Toronto Downtown

Colliers Canada's head of research, leading a cross-country team of 20 mapping, analytics and research professionals. Formerly head of Canada research at Cushman Wakefield and Director of Analytics at Oxford Properties. Featured in mainstream publications such as the Toronto Star, industry publications and podcasts. Specializing in the big picture and the fundamentals driving real estate - demographics, the macro environment and the global economy. 

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