Statistics Canada reported Monday that the Consumer Price Index (CPI) increased 3.2 per cent year over year in May, up from a 2.8 per cent gain in April.

Higher prices for gasoline continued to drive the acceleration in the headline CPI in May. However, excluding gasoline, the CPI still rose at a faster pace year over year in May compared with April.  On a month over month basis inflation was up one per cent over the month in May.

On a year-over-year basis, gasoline prices rose at a faster pace in May (+33.2%) compared with April (+28.6%). Supply uncertainty stemming from the conflict in the Middle East, specifically the closure of the Strait of Hormuz, put upward pressure on gasoline prices for the third consecutive month. Consumers paid the highest prices for gasoline since June 2022, when Russia’s invasion of Ukraine created supply uncertainty.

Year over year, consumers paid more for travel tours in May (+0.7%) compared with April (-11.0%). On a year-over-year basis, prices for air transportation rose 7.4 per cent in May, following a 1.7 per cent decline in April. StatsCan says airlines are experiencing higher operational costs, notably for jet fuel.

And prices for fresh fruit rose at a faster pace year over year in May (+5.3%) compared with April (-0.5%) mostly driven by berries and grapes.

On a year-over-year basis, prices for fresh vegetables increased 9.0 per cent in May, following a 4.1 per cent increase in April. The upward movement was attributed to higher prices for broccoli, cauliflower, tomatoes and lettuce. Tomato prices rose 45.2 per cent in May due to supply contractions in Mexico where they suffered from poor weather and a reduction in planted acreage following the implementation of US tariffs.

On a month-over-month basis, prices for fresh vegetables rose 5.5 per cent in May following a decline of 3.9 per cent in April. Statistics Canada say it is the largest monthly May increase since 2008 and is attributed to reduced supply and higher fuel costs.