|Another bad inflation number was posted today. The rate of consumer inflation continued to rise, reaching 8.1% year over year (y/y) in June, following the 7.7% gain in May. The increase was the largest yearly change since January 1983. The acceleration in June was mainly due to higher prices for gasoline; however, price increases remained broad-based, with seven of eight major components rising by 3% or more.
Excluding gasoline, the CPI rose 6.5% year over year in June, following a 6.3% increase in May (see chart below).
On a monthly basis, the CPI rose 0.7% in June, following a 1.4% increase in May. On a seasonally adjusted monthly basis, the CPI was up 0.6%.
On average, prices rose faster than hourly wages, which increased 5.2% from 12 months to June, based on the Labour Force Survey data. Gasoline prices are highly visible and have surged a whopping 54.6% y/y. That compares to a 48% increase in May. There might be some reprieve in this component of inflation, as gas prices largely follow crude oil prices, which peaked in early June and have trended downward so far in July. This would be welcome news for the Bank of Canada.