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May 18, 2022

Canada’s annual inflation rate edges up to 6.8% in April

Canada’s annual inflation rate accelerated again in April, edging ahead of analyst expectations, largely driven by rising food and shelter prices, Statistics Canada data showed on Wednesday.

Headline inflation hit 6.8% in April, just beating analyst forecasts that the annual rate would stay flat at 6.7%, and edging closer to the 6.9% hit in January 1991. It was the 13th consecutive month above the Bank of Canada’s 1-3% control range.

Grocery prices rose 9.7% in April, the largest increase since September 1981, with consumers paying more for nearly everything at the grocery store, said Statscan. Prices for starchy staple foods like pasta and bread led gains.

“Russia’s invasion of Ukraine in late February put upward price pressure on food products that use wheat,” said Statscan. “Poor weather in growing regions has also impacted prices for food.”

Statscan, which will change how its tracks used car prices starting with its release next month, said in a separate paper that March’s headline rate would have been 6.9% instead of 6.7% had the new methodology been in place at the last basket update.

Shelter prices in April rose at their fastest pace since June 1983, as high housing costs and rising rent continued to drive gains, with mortgage interest costs rising on the month for the first time since April 2020.

Gasoline prices fell slightly in April from March. Still, consumers paid 36.3% more at the pump for gasoline in April compared with a year-ago.

The CPI common measure, which the Bank of Canada says is the best gauge of the economy’s performance, rose to 3.2% from an upwardly revised 3.0% in March and ahead of analyst forecasts of 2.9%. CPI trim was 5.1% and CPI median was 4.4%.

The Canadian dollar was trading at 1.2807 to the greenback, or 78.08 U.S. cents.

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