Inflation rate jumps again to new 18-year high of 4.7%
Canada's inflation rate jumped to a new 18-year high of 4.7 per cent last month, led by sharply higher prices for energy.
Statistics Canada says the 4.7 per cent rate is the highest since February 2003.
The showing was in line with what economists were expecting, but as Doug Porter with Bank of Montreal noted, "It's almost a relief in 2021 when hot inflation readings aren't even hotter than expectations." "While perhaps not quite as eye-popping as the latest 6.2 per cent U.S. headline inflation print, this still marks a massive upswing from inflation of just 0.7 per cent a year ago," Porter said.
All eight components that the data agency tracks were higher, but the increase was led by higher transportation costs, which went up by more than 10 per cent in the past year.
Within that, gasoline was a major factor, as prices at the pump have risen by 41.7 per cent since October of last year.
"The good news is that pump prices look to be about flat in the current month," Porter said. "But just as pump prices may be stabilizing, other necessities are grabbing at the baton."
The rising cost of the car itself is also a major driver of inflation right now. New vehicle prices have risen by 6.1 per cent in the past year, mostly due to an ongoing shortage of semiconductor chips.
Food prices continue to move higher. Meat prices have risen by almost 10 per cent, on average, with bacon in particular going up at more than twice that rate. Overall, Canadians grocery bills are going up at a 3.9 per cent annual pace.