Canada consumer prices fall 0.4% in May 2020

OTTAWA, Canada – Canadians paid 0.4% less for goods and services in May versus a year earlier, the government statistical agency said Wednesday, June 17.

Economists had forecast a 0.1% rise in the Consumer Price Index, following a 0.2% decline the previous month.

According to Statistics Canada, buying and insuring a vehicle cost more in May.

Gasoline prices also rebounded as pandemic restrictions eased and major oil-producing countries agreed to slash output, but prices were still down almost 30% year-on-year.

Meat prices rose as well, in part due to temporary closures of several beef processing plants following COVID-19 outbreaks.

And stockpiling of non-perishable foods drove up prices for canned tuna, flour, and rice.

Meanwhile, telephone costs dropped as wireless carriers offered specials for plans with higher data allowances.

Mortgage costs also fell as banks lowered rates in response to falling bond yields and record low Bank of Canada lending rates.

Rents declined for a second consecutive month, as many short-term rental units were converted to long-term rentals in response to lower demand, boosting the supply of rentals in major cities.

This came as the closure of the Canadian border and less domestic travel pushed down the costs of hotel accommodation. – Rappler.com