Canada’s CPI recorded a notable increase in May, climbing to 2.9% yoy from 2.7% yoy the previous month, surpassing the anticipated rate of 2.6%. This acceleration in headline CPI was primarily fueled by a significant uptick in service prices, which rose by 4.6% yoy in May, following a 4.2% yoy increase in April.
Diving deeper into the components, CPI median—which represents the midpoint of price changes—escalated from 2.6% yoy to 2.8% yoy, again outstripping the forecast of 2.6%. CPI trimmed, another measure that excludes extreme price movements, held steady at 2.9% yoy, also exceeding expectations of 2.8%. In contrast, CPI common, which reflects the common price changes across categories, slowed slightly from 2.6% yoy to 2.4% yoy, falling below the anticipated 2.6%.
On a monthly basis, the CPI rose by 0.6% mom in May, doubling the expected 0.3% mom increase. Similarly, the core CPI also increased by 0.6% mom, well above the forecast of 0.2%. This indicates a broader upward pressure on prices beyond just volatile categories.
Full Canada CPI release here.
