Canada Inflation Rate Rises to 7-Month High in May

The annual inflation rate in Canada increased to 2.4 percent in May 2019 from 2 percent in the previous month and above market expectations of 2.1. It was the highest inflation rate since October, mainly boosted by cost of food and transportation

Year-on-year, prices went up further for food (3.5 percent from 2.9 percent in April), mostly driven by meat (+2.9 percent) and vegetables (+16.7 percent); transportation (3.1 percent from 2.5 percent); clothing & footwear (1.4 percent from 1 percent); health & personal care (1.1 percent from 0.7 percent); and alcoholic beverages, tobacco products and recreational cannabis (2.1 percent from 2 percent). Also, cost of household operations, furnishings and equipment rebounded (0.9 percent from -0.1 percent). Meanwhile, inflation was steady for shelter (at 2.7 percent, the same as in April) and recreation, education and reading (at 1.8 percent). 

Regarding special aggregates of the CPI, prices of durable goods advanced 2.5 percent, faster than a 1.3 percent gain in April; and cost of services rose to 2.7 percent, after increasing 2.4 percent in the prior month. On the other hand, cost of energy products dropped (-0.1 percent from 0.7 percent).

On a monthly basis, consumer prices increased 0.4 percent, unchanged from the previous month and compared with market consensus of a 0.2 percent rise. 

The BoC's annual core inflation, which excludes volatile items, went up to 2.1 percent from 1.5 percent in April and well above market forecasts of 1.2 percent.

Canada Inflation Rate Rises to 7-Month High in May

Statistics Canada | Stefanie Moya |
6/19/2019 12:48:22 PM