06/17/2016 11:22 EDT | Updated 06/17/2016 12:59 EDT

Canadian Food Price Growth Cools Off As Inflation Rate Falls To 1.5%

They're not falling, but at least they're not soaring.

OTTAWA — Canada's inflation rate was 1.5 per cent in May as a drop in fuel prices from a year earlier provided an offset to increases in other consumer goods, Statistics Canada said Friday.

The federal agency's May inflation reading followed a 1.7 per cent year-over-year increase in April.

Food prices saw their smallest year-over-year gain last month since March 2014. The increase in prices of fresh vegetables and fruits saw considerable deceleration.

Food inflation was half in May what it was in April, and food prices are no longer growing faster than other costs. (Chart: Statistics Canada)

The price tag on apples, however, climbed 17.8 per cent last month compared to the year before. Over the same period, alcohol and tobacco products were up 3.2 per cent.

Higher prices for purchases such as electricity, passenger vehicles and home insurance were offset by cheaper gasoline, fuel oil and natural gas.

The gas price index shows fuel prices have risen since the start of the year, but are still lower than they were for years prior to the oil-price decline. (Chart: Statistics Canada)

Gasoline prices were down 7.1 per cent last month compared with May 2015 and, excluding gasoline, last month's inflation rate was 1.9 per cent — almost equal to the Bank of Canada's ideal target of two per cent.

The annual core inflation rate, which excludes some volatile items such as pump prices and some food, was 2.1 per cent last month after a 2.2 per cent reading in April.

Inflation was lower in eight provinces in May compared to the previous month. Only Manitoba saw a higher rate while Alberta's inflation rate was unchanged.

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