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Industry NewsInflation surpasses 5% for the first time since ‘91: Report

Inflation surpasses 5% for the first time since ‘91: Report

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In January 2022, Canadian inflation surpassed 5 per cent for the first time since September 1991, rising 5.1 per cent on a year-over-year basis and up from a 4.8 percent gain in December 2021. In comparison, the headline Consumer Price Index (CPI) increased 1.0 per cent on a year-over-year basis in January 2021.

Excluding gasoline, the CPI rose 4.3 per cent year over year in January 2022—the fastest pace since the introduction of the index in 1999. COVID-19 pandemic-related challenges continue to weigh on supply chains, and consumer energy prices remain elevated. Taken together, Canadians continued to feel the impact of rising prices for goods and services, especially for housing, food and gasoline.

On a monthly basis, the CPI rose 0.9 per cent in January, the largest increase since January 2017, following a 0.1 per cent decline in December 2021.

Inflation is often compared with changes to average wages. Wage data from the Labour Force Survey found wages rose 2.4 per cent during the same period, meaning that, on average, prices rose faster than wages and Canadians experienced a decline in purchasing power.

 

Prices for groceries increase at a faster pace

Year over year, shoppers paid more for groceries, as prices for food purchased from stores rose at a faster pace in January 2022 (+6.5 per cent) than in December 2021 (+5.7 per cent). This is the largest yearly increase since May 2009.

Prices for fresh or frozen beef (+13.0 per cent), fresh or frozen chicken (+9.0 per cent), and fresh or frozen fish (+7.9 per cent) rose more in January 2022 compared with December 2021. Margarine (+16.5 per cent), as well as condiments, spices and vinegars (+12.1 per cent) were also up compared with January 2021. Higher input prices and shipping costs, because of ongoing supply chain disruptions, have contributed to the increase in the price of food.

In addition to supply chain disruptions, unfavourable growing conditions have led to higher prices for fresh fruit (+8.2 per cent) and bakery products (+7.4 per cent).

 

(Source: https://www150.statcan.gc.ca/n1/daily-quotidien/220216/dq220216a-eng.htm)

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