Canada May CPI +3.6% vs +3.5% y/y expected

Author: Adam Button | Category: News

Canadian May consumer price index

Canada CPI
  • Prior was +3.4% y/y (was highest since 2011)
  • Month over month +0.5% versus +0.4% estimate
  • Prior m/m reading was +0.5%
  • Gasoline +43.4% y/y
  • Homeowners' replacement cost index rose 11.3%, the largest yearly increase since 1987
  • Full report
Core measures (y/y):
  • Common  1.8% versus 1.8% exp
  • Median 2.4% versus 2.3% exp
  • Trim 2.7% versus 2.3% estimate
The increase in year-over-year price growth in May was led by rising prices for shelter (+4.2%) and durable goods (+4.4%), led by passenger vehicles (+5.0%). Furniture prices rose 9.8%, the highest since 1982.

This sounds like the kind of thing the Bank of Canada will be watching very closely:

"Unlike March and April 2021, when most of the year-over-year gains in the CPI were characterized by the large upward base-year effects caused by price declines falling out of the 12-month movement, base-year effects affected the 12-month price movement for only a few key goods and services in May 2021."
There are certainly still some pandemic-related price increases though and we could also be seeing some of the lagged effects of those skews. Traveler accommodation prices rose 6.7% m/m.

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