Canadian inflation reached 6.7% last month, up a full 1% from February, according to the latest data from Statistics Canada.
Not since January 1991, when inflation hit 6.9%, has the consumer price index (CPI) been this high, StatCan noted. A combination of upward pressure on housing prices, geopolitical conflicts and supply chain bottlenecks -- the latter caused by the COVID-19 pandemic -- have wreaked havoc on commodity, energy and agriculture markets, while unemployment dropped to a record low of 5.3% last month. Moreover, the average hourly wage in Canada grew by 3.4% year over year in March.
Gasoline prices surged by 39.8% from last year in March, and by 11.8% from February, when they rose by 6.9% from January, largely as a consequence of the Russia-Ukraine war. The prices of fuel oil and other fuels were 61% higher last month than they were in March 2021.
Compared to March 2021, furniture prices were 13.7% higher last month because of persistent inventory shortages as well as increased input and shipping costs. Even the price of automobiles grew by 7% during the period, and by 4.7% from February, due to a semiconductor shortage.
Grocery prices have risen sharply, too. In March, food purchases were 8.7% higher than they were during the same month in 2021, as well as 7.4% more expensive than they were a month earlier. StatCan noted that food prices haven’t spiked like this since March 2009.
Moreover, dairy products and eggs were up by 8.5% year over year, and by 6.9% month over month, in March, marking the biggest annual increase since February 1983. Compared to March 2021, butter, cheese and fresh milk prices also increased by 16%, 10.4% and 7.7%, respectively, last month.
Traveller accommodations increased by 24.4% year over year in March, which StatCan noted is also because of heavier demand during March break.
Inflation Leading to Increased Consumer Anxiety
Soaring inflation and resulting overall higher cost of living are causing consumers considerable anxiety -- especially the younger generations.
READ: "Double Whammy" of Interest Rates and Inflation Hurting Disposable Income
According to the 2022 TD Wealth Survey, 89% of Canadians under the age of are concerned about their cost of living, with 85% citing inflation, specifically. That's followed closely by deep concern over rising home prices, according to 80% of that age group -- substantially higher than the 54% of their older compatriots who expressed the same sentiment.
Rising mortgage and interest rates were also among top financial concerns, at 71%.
The survey also noted that inflation will remain elevated until sometime in 2023 and that Canadians should brace themselves for a period of inflationary pricing for goods and rising interest rates.
