Canada’s inflation accelerated more than expected in May, with headline CPI rising from 2.8% yoy to 3.2% yoy, above market expectations of 3.0% yoy. On a monthly basis, consumer prices increased 1.0%. The latest rise was driven primarily by another sharp increase in gasoline prices, reflecting ongoing energy market disruptions linked to tensions in the Middle East.
Gasoline prices climbed 33.2% yoy in May, up from 28.6% yoy in April, marking the third consecutive month of upward pressure from supply uncertainty surrounding the closure of the Strait of Hormuz. Statistics Canada noted that consumers paid the highest gasoline prices since June 2022, when Russia’s invasion of Ukraine disrupted global energy markets. However, inflationary pressures were not limited to fuel. Excluding gasoline, CPI accelerated from 2.0% yoy to 2.2% yoy, indicating broader price pressures across the economy.
The core inflation picture was mixed but generally firm. CPI median held steady at 2.1% yoy and CPI trimmed remained unchanged at 2.0% yoy, both matching expectations. However, CPI common, which measures common price movements across categories, accelerated from 2.5% yoy to 2.7% yoy, exceeding expectations.
| Indicator | April | May | Consensus |
|---|---|---|---|
| Headline CPI YoY | 2.8% | 3.2% | 3.0% |
| Headline CPI MoM | – | 1.0% | 0.70% |
| CPI ex-Gasoline YoY | 2.0% | 2.2% | – |
| Gasoline Prices YoY | 28.6% | 33.2% | – |
| CPI Median YoY | 2.1% | 2.1% | 2.1% |
| CPI Trimmed YoY | 2.0% | 2.0% | 2.0% |
| CPI Common YoY | 2.5% | 2.7% | 2.5% |
