Higher prices for vegetables and airfares contribute to higher cost of living.
Even as wage growth slows, Canada’s inflation rate has surged to 2%, making it even tougher for people to make ends meet.
Higher vegetable prices and more expensive airfares pushed inflation up from 1.7% to in November to 2.0% in December.
Economists had predicted that the rate of inflation would stay at 1.7%.
The increase was offset somewhat by lower gas prices – which fell 8.6% in December. Another measure of inflation – which reduces the volatility of gas prices to get a more balanced view – put the inflation rate in December at 2.5%.
Higher mortgage interest costs (up 7.5%), higher premiums to insure vehicles (up 5.1%), and higher restaurant costs (up 3.8%) also contributed to the higher inflation rate.
The backdrop to all of this is the fact that wage growth has been slowing. Many measures of observation have now shown inflation rising higher than wages, which means Canadians are getting poorer in real terms.
That reality of people falling further behind is often hidden behind statistics like the unemployment rate (which excludes people who have given up looking for work) and GDP growth (which is often due entirely to population growth meaning individual Canadians aren’t getting any richer).
What matters most isn’t one month’s stats, but the long-term trend. And the long-term trend is clear. Life is getting more and more expensive, and more and more Canadians are falling behind in our weak economy with a government determined to take as much of our money as they can grab.