Consumer prices continued to rise in Canada in May 2022, where inflation reached 7.7% year over year. This is the largest annual increase seen since January 1983, according to the latest data from Statistics Canada released on Wednesday.
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Excluding gasoline, the Consumer Price Index (CPI) increased 6.3% year-on-year in May, surpassing the 5.8% increase registered in April 2022. (+4.7%).
Statistics Canada says price increases have remained widespread, putting pressure on Canadians’ wallets and “in some cases affecting their ability to pay for everyday expenses.”
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The increase in croissance in May is mainly attributed to the house of prices for essentials, which increased by 12% due to April 2022, even though there was an increase in prices for services, such as hotels and the restaurants.
“According to wage data from the Labor Force Survey, average hourly wages rose 3.9% year-on-year in May, meaning that, on average, price growth outpaced wage growth over the previous 12 months. ”, also pointed out the federal agency.
Between April and May, the CPI rose 1.4% in May, after rising 0.6% in April.
- Listen to Alexandre Moranville’s interview with Sylvain Charlebois on QUB radio:
The increasingly expensive shopping basket and gasoline
Year over year, Canadians paid 9.7% more for food purchased in stores in May.
“Supply chain disruptions, coupled with rising transport and input prices, continued to put upward pressure on prices,” Statistics Canada said.
In particular, edible fats and oils (+30%) registered a record increase, mainly due to higher cooking oil prices.
Gasoline prices rose 12% in May, after falling 0.7% in April. According to Statistics Canada, this is the largest monthly increase since May 2020. Year over year, consumers had to pay 48% more to refuel in May.
“We were expecting stronger price increases than the estimated consensus forecasts, but these numbers are still very surprising,” said Royce Mendes, managing director and head of macro strategy at Desjardins, and Tiago Figueiredo, macro strategy partner.
In Quebec, the CPI rose 7.5% year over year. In monthly terms, it increased by 1.4% between April and May.
Residents of Prince Edward Island have to deal with the worst rate of inflation in the country, which reached 11.1% year-on-year, followed by Nova Scotia and New Brunswick (8.8%) and Manitoba (8.7%) .
According to the two macroeconomics experts, the Bank of Canada (BoC) is likely to raise rates another 75 basis points in July, “a drastic step that should have been taken earlier this month”.
“Monetary policy works with long and variable lags. The BoC’s benchmark rate will no longer be as clearly stimulative and decoupled from inflation, and the housing market will likely feel the effect of the rate hike even more than it does now, as well as planning “more dovish measures to tighten policy this year.” fall”.
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