Inflation rate cools to 1.3% in May as food prices now cheaper than a year ago

The cost of living rose by 1.3 per cent in the year up to May, a slightly slower pace than it increased by a month earlier.

Statistics Canada reported Friday that the inflation rate increased by 1.3 per cent last month, down from a 1.6 per cent annual pace in April.

One of the major factors dragging prices lower continues to be food, although by less than it was before.

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Food prices have dropped by 0.1 per cent in the year up to May, the data agency calculates,with meat and bakery products contributing the most to the drop. And prices for food bought in stores were down by even more, at 1.2 per cent.

While food prices droppedoverall, the annual pace was actually less than it was the previous month, at 1.1 per cent.

"Recall that the Bank of Canadaspecifically cited food costs as a temporary factor driving inflation lower, but that's much less of a drag than just a few short months ago," Bank of Montreal economist Doug Porter noted.

It's also worth noting that while food prices are slightly lower than where they were a year ago, they're still well above where they used to be, after a sharp run-up through 2014 and 2015 before softening last year a plateau that they seem to be staying on.

Meat prices, porkand beef specifically, rose 30 per cent in 2015 before levelling off. "But they've balanced out at a very high level," said Richard Evans, the director of the consumer prices division at the data agency, in an interview with CBC News. "Meat prices are still over 20 per centhigher than they were two years ago."

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ShopperShelby MacIsaac, buying groceries in St. John's on Thursday, is well aware that meat prices have been on a tear."I buy meat when it's on sale," she told the CBC, "but of course they never put it on sale [and]even when they do put it on sale it's not cheap."

Fruit and vegetable prices went through something similar, althoughvegetable prices have started to creep higher again, Statistics Canada data released Friday shows. Vegetable pricesrose year over year for the first time since August2016 in May.

"You're supposed to eat more fruits and vegetables, but they are overpriced," shopper Christine Hinds said,"severely overpriced."

So while prices are lower compared to a year ago, even the data agency concedes that over a slightly longer timeframe they're anything but.

"If they feel stretched buying food that's the right feeling to have," Evans said. "I feel it, too, and that stretching feeling really kicked in in 2014."