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Inflation in Canada falls to 7.6% in first decrease in a year – CBC News

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Canada’s inflation rate fell to 7.6 per cent in July, according to a report Tuesday from Statistics Canada, marking the first time in 12 months that the rate has decreased from the previous month.

In June, inflation hit a 39-year high of 8.1 per cent, with gasoline prices the single biggest contributor to the overall rate increase.

By contrast, gasoline prices declined on a monthly basis in July, according to the agency’s Consumer Price Index. Consumers paid 9.2 per cent less for gasoline in July than they did in June, a monthly decline not seen since April 2020.

Ontario saw a 12.2 per cent monthly decline in gas prices — the largest of any province — after the provincial government implemented a gas and fuel tax cut on July 1. But some consumers have already made significant lifestyle changes to balance out the high costs.

“I had to sell my truck and buy a smaller car,” said Cameron Benn, a small business owner based in Brampton, Ont. “Because I was paying, per week, it was almost like $300 in gas. Just in gas, not the insurance, anything else. So it was like $1,200 a month just for gas.”

“I got to the point where it just … didn’t make sense to have [the truck] anymore. So it sucks, ’cause I love the truck, but the wallet was not liking it, for sure.”

The overall downward trend, which was expected by economists, indicates that skyrocketing inflation is starting to ease up. But it’s still a long way from the Bank of Canada’s 2.2 per cent target.

WATCH | When will ‘normal’ inflation rates return? 

‘Normal’ inflation likely 18 months away, personal finance writer says

5 hours ago

Duration 6:34

Canada’s annual inflation rate declined slightly in July to 7.6 per cent, but a return to normal inflation rates of two to three per cent is still about 18 months away, says personal finance writer Rubina Ahmed-Haq.

While inflation went up by 0.1 per cent compared to June, measures of core inflation increased, said Tu Nguyen, an economist with consulting firm RSM Canada.

That means “inflation remains pervasive across all aspects of life and not just concentrated in a few categories such as gasoline and food,” she said, adding that it will “be a while” until households can breathe a sigh of relief.

“Wage growth continues to lag inflation, resulting in households losing purchasing power. Grocery prices are still climbing due to the Russian invasion of Ukraine and resulting global food shortages.”

Groceries rise at fastest pace since Aug. 1981

Groceries are pictured in a Vaughn, Ont., supermarket on Aug. 16, 2022. The war in Ukraine is affecting the price of flour globally. (Evan Mitsui/CBC)

Even as the cost of gas declined, prices at grocery stores rose at 9.9 per cent year-over-year, their fastest pace since Aug. 1981.

Bakery products, non-alcoholic beverages, eggs and fresh fruit are among the items seeing faster price growth. Baked goods in particular are up 13.6 per cent as the Russian invasion of Ukraine has contributed to surging wheat prices.

Higher prices for services like flights (up by 25.5 per cent), natural gas (12.4 per cent) and hotel stays (10.1 per cent) were notable contributing factors to the month-over-month increase due to a busier travel season.

Monthly rent is going up, too, according to the StatsCan report. With high interest rates sidelining buyers who can’t afford to take out mortgages, the rental market has expanded and rent prices are accelerating at a faster pace than in June.

Bank of Canada must continue to act: economist

Royce Mendes, an economist with Desjardins, told CBC News it’s clear that “the Bank of Canada has to continue to act.”

Last month, the Bank of Canada hiked rates a full percentage point to 2.5 per cent — the most recent in an ongoing and aggressive campaign to cool runaway inflation.

WATCH | Bank of Canada issues largest interest rate hike in nearly 25 years:

Bank of Canada hikes rates massively to fight inflation

1 month ago

Duration 2:19

An increase in lending rates was expected amid runaway inflation, but experts are still surprised at the size of the boost — it’s the largest in almost 25 years.

While it is widely expected that more rate hikes are to come, the question is whether the bank will issue a 50 basis point hike or a 75 basis point hike.

Even with today’s downward trending annual inflation rate, it remains to be seen how much that number will decrease without further action. As such, Mendes says he is cautious in declaring that inflation has peaked.

“There’s still a lot of inflation to come down and show up in the official statistics. And there’s still a lot of uncertainty with regards to the global economy, particularly with what’s going on in the Ukraine and what could happen this fall,” he said.

“So while I am cautiously optimistic that inflation has peaked, I’m not sure that it’s completely a done deal.”

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US bear market deepens: What that means for you – Al Jazeera English

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United States stocks slumped further this week as investors navigated a barrage of bad news.

Central banks around the world have been scrambling to fight soaring high inflation by increasing the cost of borrowing without hurting long-term growth prospects. Adding to the uncertainty and fear are rising tensions between the West and Russia following Moscow’s invasion of Ukraine.

In the US, the S&P 500 – a proxy for the health of retirement and college savings accounts – this week fell to its lowest level in almost two years and was set for a monthly decline of nearly 8 percent.

The tech-heavy Nasdaq 100 has dropped nearly 33 percent so far in 2022, the Dow Jones Industrial Average lost more than 20 percent while the world’s best-known cryptocurrency, Bitcoin, shed nearly 60 percent of its value. Home prices are also dropping as interest rates soar, making loans for potential buyers more expensive.

The Federal Reserve, the country’s central bank, is tasked with fighting the highest inflation in decades and has been doing that by raising interest rates. But can it increase the cost of capital to reduce demand and moderate prices without plunging the economy into a deep recession?

“It’s really a no-win situation at this point. Largely because of the number of shocks policymakers have had to deal with,” Cristian deRitis, leading economist at Moody’s, a research firm based in New York, explained to Al Jazeera.

How much further down can stocks go? What is a bear market exactly? And is there a light at the end of the tunnel?

Here’s the short answer.

I keep hearing that the US is in a bear market. What is that exactly?

A bear market occurs when a broad market index dips more than 20 percent from recent highs.

Why is the US currently in a bear market?

“Persisting concerns over inflation and the Fed’s ability to tame prices without a hard landing,” is how Peter Essele, head of portfolio management at Commonwealth Financial Network, a Massachusetts-based firm, explained it.

What’s the reason behind the high inflation and why are prices out of control?

Kenneth McLaughlin, professor of economics at Hunter College in New York, told Al Jazeera that one of the reasons is the federal government “injecting $5 trillion into the economy including through stimulus checks during the pandemic with kind of good intentions but with no plans to pay for it.”

In other words?

Think back to early 2020 when businesses shuttered and economies came to a standstill to curb the spread of the coronavirus. Millions of Americans found themselves under lockdown with nowhere to go and spend the fresh-off-the-press stimulus checks. That caused equity prices, be it stocks, Bitcoin and home prices across the US, to skyrocket. It also caused a surge in demand for goods and that, as we see now, has led to the highest rise in the cost of living seen in decades.

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S
The war in Ukraine and growing tensions between the West and Russia are expected to continue to spook investors and roil markets [File: Brendan McDermid/Reuters]

How does this cause the stock market to go down?

As the Fed raises rates, which is essentially increasing the cost of borrowing in order to bring down the price of goods and services, people start to fear a slowdown in the economy. This pushes down the price of stocks and other investments.

Are the current economic conditions really just the consequence of what happened in the last 2 years?

The last two years have been unprecedented in many aspects. But what we are seeing today can also be attributed to the extremely low interest rates of the last decade when, following the financial crisis of 2007-2008, the government made it cheaper for Americans to borrow, Essele told Al Jazeera.

Didn’t the markets just have a rally?

Stocks did experience a rally in August. Things were looking up when petrol prices, which had soared in earlier months, dropped sharply. Investors held on to the hope that perhaps the Fed would ease on the interest rate hikes if the inflation numbers for August showed that consumer prices had cooled. But despite cheaper petrol, food and other essential goods, prices remained high – surging 8.3 percent in August compared with a year earlier.

Where are we now?

“Inflation is becoming more structural and investors are now concerned about stagflation,” Essele explained to Al Jazeera, suggesting that price hikes may be here to stay for the long haul. Stagflation is a mashup of the words “inflation” and “stagnation” and refers to a situation when inflation is high even as the rate of economic growth slows down.

So what does the future hold? And how long will this bear market last?

Expect above-average price pressures. The war in Ukraine and growing tensions between the West and Russia add to the uncertainty and will continue to spook investors and roil markets.

“But we are likely in three-quarters of the way through the bear market,” Essele predicted.

I don’t own any stocks, why should I care about a bear market?

While stock investors are the ones most directly affected by a US bear market, there are spillover effects to the rest of the economy primarily due to the “wealth effect”. That is, as households see the value of their retirement and stock portfolios decline, they will pull back on their spending.

“Given how dependent the US economy is on consumer spending, this impact can be significant and widespread,” Moody’s deRitis told Al Jazeera. “Discretionary sectors such as travel, leisure, and hospitality may feel the most immediate effect but other industries such as housing and retail trade will experience reduced demand as households grow cautious.”

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Ontario Securities Commission files allegations of fraud in multimillion-dollar crypto offering – CP24

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TORONTO – The Ontario Securities Commission says it has filed allegations against Troy Richard James Hogg related to a crypto token offering that raised US$51 million.

The statement of allegations says that between May 2017 and June 2019, Hogg, an Ontario resident, promoted and sold a crypto asset named Dignity token, previously called Unity Ingot, to investors around the world.

The regulator alleges that Hogg and his companies – Cryptobontix Inc., Arbitrade Exchange Inc. and Arbitrade Ltd. – defrauded investors with false and misleading statements in promotional materials, including that gold bullion supported the value of the tokens.

The OSC alleges that Hogg and his companies further defrauded investors by spending a significant amount of invested funds on things unrelated to crypto security tokens, including buying real estate and making payments to companies controlled by Hogg.

The regulator also alleges that Hogg did not file a prospectus for the token or obtain the necessary registration with the OSC to engage in trading activities.

The OSC says it was assisted in its investigation by the U.S. Securities and Exchange Commission, which ran a parallel investigation and has levelled charges against Hogg and several U.S. residents.

This report by The Canadian Press was first published Sept. 30, 2022.

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Lululemon settles lawsuit with Peloton over allegations of ‘copycat’ clothing

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Two of North America’s biggest names in fitness have settled a lawsuit over allegations of “copycat” sports bras and workout tights.

Vancouver-based “athleisure” brand Lululemon has agreed to terms with American exercise bike company Peloton after negotiating a “mutually agreeable settlement” in the patent dispute, according to a notice of voluntary dismissal filed in a California district court on Friday.

The terms of that agreement have not been made public.

Lululemon filed suit in November, claiming Peloton’s Strappy Bra, Cadent Laser Dot Legging, Cadent Laser Dot Bra, High Neck Bra, Cadent Peak Bra and One Luxe tights were all rip-offs of its own products.

“Unlike innovators such as Lululemon, Peloton did not spend the time, effort and expense to create an original product line,” the Lululemon claim read.

“Instead, Peloton imitated several of Lululemon’s innovative designs and sold knock-offs of Lululemon’s products, claiming them as its own.”

Court documents show that the dispute dates back to a 2016 co-branding deal that allowed Peloton to put its logo alongside Lululemon’s on certain Lululemon products that were sold through Peloton stores.

In its own court filings, Peloton claimed the arrangement was “burdensome and time-intensive,” leading the company to end the partnership and develop “its own private label brand of fitness apparel.”

This image is included in a lawsuit filed by Lululemon against Peloton. Lululemon claimed the average customer would not be able to tell their products apart. (U.S. District Court)

Lululemon, in turn, claimed that Peloton had simply imitated some of its garments. The yoga wear firm sent Peloton a cease-and-desist letter on Nov. 11, 2021, asking the company to “immediately stop selling its copycat product.”

According to the Lululemon lawsuit, Peloton said it needed until Nov. 24 to respond to the accusations in the letter.

Instead, Peloton filed its own lawsuit in the Southern District of New York, alleging that Lululemon was making “baseless threats” and asking a judge to pre-emptively declare that Peloton had done nothing wrong.

News of the settlement in California comes just one day after a judge in New York dismissed Peloton’s lawsuit, ruling it “an improper anticipatory declaratory judgment action,” filed with the intention of beating Lululemon to the courthouse.

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