Consumer prices continued to rise in Canada in May 2022, where inflation hit 7.7% year over year. This is the largest annual increase since January 1983, according to the latest Statistics Canada data released Wednesday.
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Excluding gasoline, the Consumer Price Index (CPI) rose 6.3% year over year in May, exceeding the 5.8% increase recorded in April 2022. (4, 7%).
Statistics Canada says price increases have continued to be widespread, putting pressure on Canadians' wallets, and "in some cases impacting their ability to afford day-to-day expenses."
The acceleration in growth in May is mainly attributed to the increase in gasoline prices, which increased by 12% compared to April 2022, as well as to the 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-over-year in May, meaning that, on average, the rise in prices exceeded that of wages over the previous 12 months,” the federal agency also noted.
Between April and May, the CPI rose 1.4% in May, after rising 0.6% in April.
The increasingly expensive grocery basket and gasoline
Year over year, Canadians paid 9.7% more for food purchased from stores in May.
“Supply chain disruptions, along with rising transportation and input prices, continued to put upward pressure on prices,” Statistics Canada said.
In particular, edible fats and oils (30%) recorded 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 fill up with gas in May.
“We were expecting stronger price increases than the consensus forecasts estimated, but these figures are still very surprising,” commented Royce Mendes, managing director and head of macroeconomic strategy at Desjardins and Tiago Figueiredo, partner. – macroeconomic strategy.
In Quebec, the CPI rose 7.5% year over year. On a monthly basis, it increased by 1.4% between April and May.
Residents of Prince Edward Island have to deal with the worst inflation rate 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 macroeconomic experts, the Bank of Canada (BoC) risks raising rates by another 75 basis points in July, “a drastic step that it should have taken earlier this month”.
“Monetary policy works with long and variable lags. The BoC's key rate will no longer be as clearly stimulating and disconnected from inflation, and the housing market will probably feel the effect of the rate hike even more than it does now. also planning “more moderate measures to tighten the policy this fall”.