Food, gasoline see dramatic spike in prices as annual inflation rate hits 4.4 percent

Statistics Canada said on Wednesday that the annual pace of inflation rose in September to reach highs not seen since February 2003.

Compared to last year, StatCan says that its consumer price index last month increased 4.4 percent.

According to the report: The Consumer Price Index (CPI) rose 4.4 percent on a year-over-year basis in September, which StatCan says is "the fastest pace since February 2003 and up from a 4.1% gain in August. Excluding gasoline, the CPI rose 3.5% year over year in September."

StatCan also highlighted the increase in prices, particularly with transportation (+9.1 percent).

"Prices rose year over year in every major component in September, with transportation prices (+9.1%) contributing the most to the all-items increase. Higher shelter (+4.8%) and food prices (+3.9%) also contributed to the growth in the all-items CPI for September," the report says.

Prices at the gas pump also rose 32.8 percent compared with September last year. "The contributors to the year-over-year gain include lower price levels in 2020 and reduced crude output by major oil-producing countries compared with pre-pandemic levels," says StatCan.

Gasoline prices fell 0.1 percent month over month in September, however, "due to uncertainty about global oil demand continued following the spread of the COVID-19 Delta variant."

StatCan says that prices for food rose 3.9 percent year-over-year in September, with prices rising 2.7 percent in August.

"The gain in September was led by prices for food purchased from stores, which rose 4.2% in September, following a 2.6% increase in August. Food purchased from restaurants rose 3.1% in September, following a 3.2% increase in August," the report says.

Meat products saw a nearly 10 percent increase "in almost every sector in September and rose the fastest pace since April 2015, following a 6.9 percent gain in August," the report says.

"Prices for fresh or frozen chicken (+10.3%) and fresh or frozen beef (+13.0%) were up in September, partly due to higher input costs and continued strength in demand."

"Pork (+9.5%) and processed meat (+6.2%) prices increased in September compared with September 2020. Prices for bacon (+20.0%) saw the largest year-over-year gain since January 2015. Temporary closures of production facilities partially contributed to the higher prices.

"Prices for seafood and other marine products also rose year over year (+6.2%). Consumers paid more for shrimps and prawns (+8.9%), which contributed the most to the increase, as supply chain disruptions in major export countries continue to have an impact on prices.

"Prices for dairy products (+5.1%) such as butter (+6.3%) and cheese (+4.6%), and eggs (+5.4%), all rose in September compared with the same month last year. Prices for edible fats and oils rose 18.5%, the largest year-over-year increase since January 2009."

The full report can be read on StatCan's website, here.