Annual Inflation goes up to 5.1% in January

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Annual pace of inflation topped five per cent for the first time in more than 30 years, Statistics Canada said on Wednesday.

The Consumer Price Index (CPI) rose 5.1% on a year-over-year basis in January 2022, up from a 4.8% gain in December 2021. Excluding gasoline, the CPI rose 4.3% year over year—the fastest pace since the introduction of the index in 1999.

Gasoline prices were up 31.7 per cent last month compared with January 2021.

On a monthly basis, the CPI rose 0.9% in January 2022, the largest increase since January 2017, following a 0.1% decline in December 2021. On a seasonally adjusted monthly basis, the CPI was up 0.6%, according to  Statistics Canada.

In January, prices rose in all major components on a year-over-year basis, with shelter prices (+6.2%) contributing the most to the all-items increase.

Year over year, prices for services (+3.4%) rose in January, matching the increase in December 2021. Prices for goods (+7.2%) grew at a faster pace in January 2022 than in December 2021 (+6.8%), contributing to the price growth in the CPI.

Inflation is often compared with changes to average wages. In January 2022, the CPI rose 5.1% on a year-over-year basis. Wage data from the Labour Force Survey found wages rose 2.4% during the same period, meaning that, on average, prices rose faster than wages and Canadians experienced a decline in purchasing power.

 

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