Inflation rate falls to -0.4% in May, second month in a row below zero

Canada’s inflation fee fell to a -0.4% annual tempo in Could, the second month in a row beneath zero as cheaper gasoline offset value will increase elsewhere.

Statistics Canada reported Wednesday that 4 of the classes the information company tracks had been down in Could in comparison with final 12 months’s stage, together with transportation, clothes and footwear. The opposite 4 had been increased, together with meals and shelter prices.

The worth of gasoline was the largest influencer on the numbers, as pump costs had been 29.eight per cent decrease in Could 2020 than in Could 2019. If gasoline is stripped out of the numbers, the inflation fee would have been 0.7 per cent for the month. That is nonetheless the softest displaying since 2013, however it’s at the very least in constructive territory.

“The financial hit from COVID-19 and the lockdown are weighing closely on client costs, which fell probably the most for the reason that 2008-2009 monetary disaster,” BMO economist Benjamin Reitzes stated.

Beneath the headline quantity, quite a lot of items and companies noticed costs improve over the previous 12 months, together with:

  • Automotive insurance coverage, which went up by 6.Four per cent.
  • Meat, which went up by 7.eight per cent.
  • Mortgage curiosity prices, which went up by 3.Three per cent.
  • Restaurant meals, which went up by 2.2 per cent.

Along with gasoline, quite a lot of objects had been less expensive in Could than they had been a 12 months in the past, together with:

  • Journey lodging, down 21.Three per cent.
  • Phone companies, down 9.5 per cent.
  • Girls’s clothes, down 5.9 per cent.
  • Electrical energy, down 4.6 per cent.

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