Inflation slows after hitting four-decade high

Consumers were able to stretch their dollars a little bit farther last month after inflation dipped by half of a percentage point to sit at 7.6 per cent after hitting a four decade high the previous month.

Declining gas prices played a role.

“Today’s inflation numbers, I think, reflect how important fuel is to our economy,” said Dan McTeague, a former MP and the president of Canadians for Affordable Energy. “No it didn’t bring down inflation to zero but anybody who underestimates the cost of energy I think is kidding themselves.”

June closed out with gas selling for a minimum of 213.9 in Halifax. As of Tuesday, Nova Scotians are paying 1.71 to pump a litre of fuel, still not low enough to change John Mahtab’s driving habits.

“We just try to be more efficient about it. Instead of just running off for one thing, planning our trips better,” Mahtab says.

What’s not getting cheaper however is what shoppers are putting in their grocery carts.

“It seems like pretty much everything has gone up,” Susan Mahtab says.

She’s right. Eggs, coffee and tea, bakery products, and fresh and preserved fruit have all gone up year-after-year by more than 10 per cent.

“It’s been a bit of a slow creep, but today, I haven’t been for a couple weeks, and noticed a couple of dollars in some items,” Mahtab adds.

This coming as food inflation actually dropped.

“The food inflation rate in Canada has peaked,” says Dalhousie University’s food economist, Sylvain Charlebois. “It did peak back in may so the food inflation rate went from 9.4 per cent to 9.2 per cent.”

McTeague doesn’t think the drop in the rate of inflation will last long. He says he anticipates fuel prices to climb again in the fall and take the cost of living along for the ride.