Canadian inflation jumped to 7.7 percent in May, marking the largest annual increase in prices for goods and services in almost four decades, the government statistical agency said Wednesday.
The figure topped even the most bullish forecasts, following a 6.8 percent rise in prices the previous month.
The price increases, Statistics Canada said in a statement, were “broad-based, pinching the pocketbooks of Canadians and in some cases affecting their ability to meet day-to-day expenses.”
Desjardins analyst Royce Mendes reacted by saying the agency “really should add a warning label to these scorching hot inflation prints.”
“We had expected stronger price increases than the consensus, but this is very surprising,” he said in a research note, warning that a “jumbo-sized” interest rate hike by the Bank of Canada is now likely coming.
According to Statistics Canada, gasoline led the rise in prices, up 48 percent in the 12 months to May 31.
Groceries also cost more (up 9.7 percent) due to supply chain disruptions as well as higher transportation and input costs.
Cooking oil notably recorded its largest price increase ever. Costs of fresh vegetables such as onions, peppers and carrots, as well as fish also rose.
Shelter and furniture costs were up too, along with prices for hotel rooms and restaurant meals, reflecting higher demand for travel following the lifting of most pandemic public health measures.
Wages, meanwhile, failed to keep pace, rising only 3.9 percent year over year in May.
