Statistics Canada reports annual pace of inflation rises in May to 2.4%

Transportation prices gained 3.1 per cent as the cost of air transportation added 8.9 per cent

Statistics Canada in Ottawa. (The Canadian Press)

The annual pace of inflation picked up in May as the consumer price index rose 2.4 per cent compared with a year ago, its largest increase since October last year, Statistics Canada said Wednesday.

The move compared with a 2.0 per cent increase in April and was the fourth straight month of rising year-over-year increases. Economists had expected an increase of 2.1 per cent for May, according to Thomson Reuters Eikon.

READ MORE: Canadian inflation rises in April; gas prices strengthen from carbon pricing

Broad-based gains helped boost prices in all eight of major components of the index compared with a year ago.

Food prices rose 3.5 per cent as fresh vegetable prices climbed 16.7 per cent, the largest year-over-year increase since February 2016.

Transportation prices gained 3.1 per cent as the cost of air transportation added 8.9 per cent and the cost of passenger vehicles rose 4.2 per cent. Passenger vehicle insurance premiums rose 8.1 per cent.

However, drivers paid 3.7 per cent less for gasoline compared with a year ago.

Excluding gasoline, the consumer price index increased 2.7 per cent compared with a year ago, compared with a 2.3 per cent increase in April.

The rise in prices put inflation ahead of the Bank of Canada’s ideal target for inflation of 2.0 per cent.

The Bank of Canada, which adjusts its key interest rate to keep inflation in check, has kept rates on hold in recent months after the economic weakness at the end of 2018 and the start of this year.

However, the central bank has been predicting the economy will pick up.

The Statistics Canada report said the average of its three gauges for core inflation, which are considered better measures of underlying price pressures because they omit volatile items like gasoline, rose to 2.07 per cent compared with 1.90 per cent in April.

Craig Wong, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Drivesmart column: What does a traffic cop do?

I think most people see a traffic cop as someone who writes speeding tickets

Lake Flashback: Logging history, leaks, the EN and more

Do you remember these stories from back in the day?

Provincial COVID-19 data can now be used for B.C. to prepare for a second wave

In the past week, B.C. has seen a slight spike in daily test-positive case counts

‘Someone knows something’: a look into Vancouver Island missing persons with interactive map

There are more than three dozen people listed as missing throughout Vancouver Island

Mary Lowther column: Growing out your own seeds

Some crops like tomatoes don’t cross pollinate well

Islanders want BC Ferries to follow order that lets residents board before tourists

For ferry-dependent communities, ferries are often the sole practical lifeline to work, school or medical appointments.

Beverly Hills 90210 star’s family selling Vancouver Island Beach Resort

You can own Jason Priestley’s Terrace Beach Resort in Ucluelet for less than $5 million

Genetic detectives begin work to trace spread of COVID-19 in Canada

The kinds of genetic technology being used for this project did not exist when SARS hit Canada in 2003

Sports fishers protest Fraser River Chinook closures

Public Fishery Alliance wants hatchery fish open for harvest

B.C. Ferries increasing passenger capacity after COVID-19 restrictions

Transport Canada 50-per-cent limit being phased out, no current plans to provide masks

Shellfish industry get funds to clean up at Island sites and beyond

Businesses can apply to cover half of costs to clean up so-called ‘ghost gear’

Amber Alert for two Quebec girls cancelled after bodies found

Romy Carpentier, 6, Norah Carpentier, 11, and their father, Martin Carpentier, missing since Wednesday

B.C. man prepares to be first to receive double-hand transplant in Canada

After the surgery, transplant patients face a long recovery

Most Read