Canada’s Inflation Rate Unchanged In May At 1.7%

Canada’s inflation rate was unchanged in May at an annualized rate of 1.7%. Statistics Canada said that the Consumer Price Index (CPI) was at the same level year-over-year in May as in April.The May reading was due largely to a smaller price increase for rents and a decline in travel tours, both of which put downward pressure on inflation. Excluding volatile energy prices, the CPI in May rose 2.7% from a year earlier, following a 2.9% annualized increase in April.At 1.7%, inflation in Canada remains below the Bank of Canada’s 2% annualized target. The shelter component of Canada’s CPI grew at a slower pace year-over-year in May, rising 3% after a 3.4% gain in April.Prices for rents rose 4.5% on a year-over-year basis in May, compared with a 5.2% increase in April. Rent price growth slowed the most in Ontario, with prices rising 3% in that province.The mortgage interest cost index decelerated for the 21st consecutive month in May, rising 6.2% following an increase of 6.8% in April.At the same time, prices for travel tours fell 0.2% in May after rising 6.7% the previous month. Prices for air transportation decreased 10.1% on an annual basis in May.Gasoline led the decline in energy prices during May, falling 15.5% year-over-year after declining 18.1% in April. Gasoline prices have been impacted by the removal of the consumer carbon levy, noted Statistics Canada. Also declining in May were prices for cellular service, which fell 5.5% from a year earlier after experiencing a 10.8% decline in April.Partly offsetting those declines were prices for new passenger vehicles sold within Canada, which rose 4.9% year-over-year in May, after increasing 4.6% in April. Across the country, inflation accelerated in six provinces, slowed in three provinces, and was unchanged in one province in May compared to April.