Annual inflation rate falls to -0.4% in May: Statistics Canada

Statistics Canada says inflation pulled back even further in May as businesses shut due to the COVID-19 pandemic began to reopen slowly.

The agency says the consumer price index fell 0.4 per cent compared with a year ago, making it the second month in a row for negative inflation after a 0.2 per cent drop for April.

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Prices rose in four of the eight major components on a year-over-year basis. Transportation prices contributed the most to the overall decline, mainly because of lower gas prices compared with May last year.

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Statistics Canada says that excluding gasoline, the consumer price index rose 0.7 per cent, the smallest increase since January 2013.

Economists on average expected the consumer price index to remain unchanged compared with a year ago — meaning an annual inflation rate of zero.