Prices for a lot of digital services, such as cellphone bills and streaming platforms, fell during the pandemic. Now they’re adding to higher inflation.
During the worst of the pandemic and well into the recovery, as rising prices took a growing bite out of household budgets, digital services such as wireless bills, streaming services and ride-hailing apps seemed immune to inflation. The vacation from digital inflation appears to be over.
On Wednesday, Statistics Canada reported consumer prices rose 8.1 per cent last month, marking the fastest annual increase in nearly four decades. At the same time, the agency updated its aggregate price index for digital services, which it launched last year. After 2½ years in which digital economy prices fell on an annual basis, they’re now adding to higher prices for consumers.
While the top-line digital economy index increase of 1.5 per cent might seem small, below the surface consumers are facing steeper bills in some areas. For one thing, Statscan said audio and video subscription services, a category that covers the likes of Spotify and Netflix, rose 6.9 per cent from the year before. The agency doesn’t publish price indexes for ride-hailing services, though both Uber and Lyft have imposed fuel surcharges this year amid high fuel prices.
At the same time, cellphone bills have stopped getting cheaper, with wireless service prices flat in June. That’s a sharp reversal from last year, when prices for wireless services were down more than 23 per cent on an annual basis at one point – a measure of relief for consumers that appears to have come to an end.Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening.
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