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Inflation cools in May as gasoline prices fall

Canada's inflation rate increased by 1.2 per cent in May

Canada’s inflation rate increased by 1.2 per cent in May

Consumer prices increased by 1.2 per cent in the 12 months ended in May, down from a two per cent pace the previous month and slightly less than what economists were expecting.

Statistics Canada said the 0.8 percentage point decline from April’s level was mostly attributable to declines for gasoline prices.

The overall energy index fell by 1.6 per cent in May, the agency said. That’s the first time that’s happened since October 2009.

After 22 consecutive annualized increases, pump prices fell 2.3 per cent in April. And natural gas was in freefall from already low levels, with prices down by 16.6 per cent this May compared with a year earlier.

Food prices up 2.5%

If energy costs were stripped out, the overall consumer price index would have been 1.7 per cent higher in May. In April, it would have been two per cent higher.

The Bank of Canada’s core index rose by 1.8 per cent, a drop from 2.1 per cent the month prior.

The main upward contributors to the rise in the CPI were higher prices for food and shelter. Prices for food purchased from stores increased 2.5 per cent in the year ended in May.

Regionally, consumer prices increased in every province and territory, but in each case, the pace of gain was slower than it was in April.

Inflation cools in May as gasoline prices fall

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