Highlights
Consumers paid 2.0% more in February for the goods and services included in the Consumer Price Index (CPI) basket than they did in February 2006. This was a substantial acceleration (0.8 percentage points) over the 12-month increase of 1.2% in January. The acceleration was mainly due to higher gasoline prices in some regions of the country this month. This increase in the 12-month rate has not been seen since September 2005 when Hurricane Katrina drove prices up sharply.
In addition to gasoline prices, the owned accommodation index also pushed up the 12-month change in the Consumer Price Index in February. Lower prices for natural gas had a moderating effect on the increase in the all-items CPI.
Excluding energy, the 12-month change in the all-items index for February was 2.2%, compared to the 1.8% change posted in the previous month. This increase has not been seen since June 2003. Higher prices for owned accommodation and food purchased in restaurants were the primary source of this growth in the all-items index excluding energy.
Following a rise of 2.1% in January, the Bank of Canada’s core index advanced by 2.4% in February 2007. This index, which is used by the Bank to monitor the inflation-control target, has remained within the target range set by the Bank of Canada for several months. The Core CPI average increase has been around 2.1% since May 2006.
The monthly all-items CPI rose by 0.7% between January and February 2007, after growing only slightly by 0.1% the previous month. This increase is due primarily to higher gasoline prices posted this month. This was the largest monthly increase since September 2005 (+0.9%).
The monthly all-items index excluding energy climbed 0.6% between January and February 2007, following an increase of 0.2% in January. A monthly increase of that magnitude was last reported in November 2004. Higher prices for fresh vegetables and travel tours contributed to the February rise.
On a monthly basis, the core index grew at 0.5%, compared to January’s 0.1% increase.
Percentage change from the same month of the previous year, Canada
Twelve-month percentage change in the CPI: +2.0%
Twelve-month percentage change in the CPI excluding energy: +2.2%
Consumer prices rose 2.0% in February 2007 compared to February 2006, after posting a 12-month increase of 1.2% the previous month. In February, the jump in gasoline prices, combined with higher prices in the owned accommodation sector, drove the growth in the all-items index.
Important factors contributing to the 2.0% increase in the 12-month change in the all-items index from February 2006 to February 2007 included mortgage interest cost, replacement cost, food purchased in restaurants and gasoline. These components were slightly offset by a drop in the price of natural gas.
Consumers in the majority of Canadian provinces had to spend slightly more in February 2007 compared to February 2006. The 1.6% growth in the all-items CPI in Ontario was mainly due to gasoline prices, while costs related to accommodation again played a key role in consumer price growth in Alberta (4.9%). Provincial averages for Alberta, British Colombia (+2.2%) and Manitoba (+2.1%) have all remained higher than the Canadian all-items CPI since September 2006. The twelve-month change in the all-items index was the same in Saskatchewan and Nova Scotia (+1.9%). Quebec (+1.4%) and the three other Atlantic provinces also posted increases, albeit smaller ones, over the same period.
Mortgage interest cost, which measures the changes brought about by prices in the amount of mortgage interest owed by homeowners, rose 5.3% in February 2007 compared to a year earlier. This was up from a 12-month change of 5.1% posted the previous month and was the largest increase since February 2001 (+5.5%). This index continued its upward trend that started in December 2005, although at a slower pace.
Homeowners’ replacement cost, which represents the worn-out structural portion of housing and is estimated using new housing prices (excluding land), grew 7.1% between February 2006 and February 2007, following a rise of 7.6% last month. Since November 2006, the 12-month change in this index appears to have begun to slow due mainly to lower pressure from Alberta, which began at the same time as the decline nationally.
Despite this slowdown, Alberta (+35.3%) and Saskatchewan (+11.1%) showed the highest increase in the homeowner’s replacement cost, with British Columbia (+3.6%) and Ontario (+3.1%) trailing far behind. In February 2007, these provinces all posted 12-month changes below those of the previous month. However, Manitoba (+6.9%) and Quebec (+3.2%) posted increases slightly higher than those reported in the previous month.
Upward pressure on consumer prices between February 2006 and February 2007 also resulted from higher prices for food purchased in restaurants (+2.6%), partly owing to higher labour costs, and from an increase in the price of gasoline (2.9%).
In contrast, in February 2007, the drop in the 12-month change in the price of natural gas had a moderating effect on growth in the all-items CPI. The price of this energy component plummeted 19.3% in February 2007 compared to February 2006. This decrease followed a drop of 21.5% posted in the previous month and a series of consecutive reductions recorded since July 2006.
Despite slightly colder temperatures in February, natural gas prices which are set quarterly in the majority of provinces remained relatively low this month compared to last year. Current prices still reflect above-normal stock levels resulting from the mild temperatures of early winter.
Canadian consumers, except those living in Alberta (+1.3%), enjoyed lower natural gas prices. Ontario (-30.4%), Manitoba (-8.3%), British Columbia (-8.2%) and Quebec (-8.0%) posted the most significant reductions over the same period.
Continuing the trend noted over several months, other components such as vehicle purchases and leases (-0.9%) and computer equipment and supplies (-19.0%) also contributed to the decline in the 12-month all-items index.
Non-seasonally adjusted monthly percentage change in the CPI: +0.7%
Non-seasonally adjusted monthly percentage change in the CPI excluding energy: +0.6%
The monthly all-items consumer price index rose 0.7% between January and February 2007 following a slight 0.1% rise in the previous month. Higher prices for gasoline, fresh vegetables and travel tours pushed consumer prices upward in February, although the rise was somewhat mitigated by lower natural gas prices.
An interruption in production in February as a result of a fire at an Ontario refinery resulted in a rapid increase in gasoline prices in certain regions of the country between January and February 2007. Production interruption in some Ontario and Quebec refineries led to the temporary closure of some gas stations in those provinces because of the reduced availability of stock. This shortage contributed to the 3.8% national increase in gasoline prices in the country in February.
Percentage change in the Gasoline index from the previous month, Canada and provinces
Between January and February 2007, pump prices climbed 9.8% in Ontario. This incident also impacted the neighbouring province and Quebecers had to pay 1.7% more for their gasoline over the same period. Gasoline prices also rose in Alberta (+2.1%). A strike created delivery problems, causing a drop in available stock and contributed to the rise in prices in February. Consumers in the three other Western provinces and in the Atlantic Provinces were not directly affected by these factors and paid less for their gas in February.
Prices for virtually all fresh vegetables rose in February 2007. The monthly change in fresh vegetables was 12.0% between January and February 2007. Cooler temperatures in the West Coast of the United States observed in January 2007 affected current harvests and drove up the price of vegetables.
The price of travel tours rose 11.3% in February compared to the previous month. This represents the most rapid increase since February 2004 (+11.9%), partly a result of a higher number of Canadians taking winter vacations abroad. In keeping with the trend, February remains the most popular month for Canadian travellers, who normally choose this month to escape to warmer destinations.
The price of non-alcoholic beverages rose 3.9% in February. Following discounts in the previous month, the return to normal price levels for men’s clothing, combined with fewer sales and smaller discounts, allowed the price of this index to climb 2.9% in February. These two components pushed consumer prices up slightly between January and February 2007.
Very few components of the all-items Consumer Price Index experienced substantial drops between January and February 2007. Only a slight downward pressure was placed on the all-items index in February by these components, which largely explains the sharp rise in this index recorded in February 2007.
The price of natural gas fell 2.9% between January and February 2007. Albertans were the only Canadians who enjoyed significantly lower prices this month (-11.9%).
Seasonally adjusted CPI climbs by 0.5% between January and February
Pushed up by the majority of components, the seasonally adjusted index rose by 0.5% between January and February 2007. Higher prices for food (+1.7%), transportation (+0.9%), household operations and furnishings (+0.3%), recreation, education and reading (+0.2%), as well as alcoholic beverages and tobacco products (+0.2%), contributed to the increase in the seasonally adjusted index in February. The housing index remained unchanged between January and February, while the drop in the indexes for health and personal care (-0.1%) and clothing and footwear (-0.7%) exerted a downward pressure on the seasonally adjusted index during the same period.
The seasonally adjusted Core Index as defined by the Bank of Canada rose by 0.2% between January and February 2007.
Special aggregates
Core CPI published on behalf of the Bank of Canada
The Core Consumer Price Index is obtained by removing the effect of the changes in indirect taxes from the all-items CPI from which eight of the most volatile components identified by the Bank of Canada have been excluded. These volatile components are fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; heating oil and other fuels; gasoline; inter-city transportation; and tobacco products and smokers’ supplies.
The 12-month change in the Core Index as identified by the Bank of Canada was 2.4% in February 2007, up from 2.1% in January. Month-over-month, this index climbed 0.5% in February 2007, compared to the 0.1% increase in the previous month.
Energy
The energy index remained unchanged in February 2007 compared to February 2006. Higher gasoline and electricity prices were almost completely offset by the drop in natural gas prices during the same period.
The 12-month increase in pump prices was 2.9% in February 2007. Higher prices for electricity (+4.0%) along with fuel, parts and supplies for recreational vehicles (+3.3%) also pushed up the energy index. However, the drop in natural gas prices (-19.3%) and in the price of heating oil and other fuels (-2.3%) had a moderating effect.
The monthly energy index rose by 1.5% between January and February 2007. The 3.8% increase in pump prices put upward pressure on the monthly energy index. Higher prices for fuel, parts and supplies for recreational vehicles (+1.6%), although not as substantial, also contributed to the rise in the energy index. Lower prices for natural gas (-2.9%), electricity (-0.2%), and heating oil and other fuels (-0.1%) slowed the increase in the monthly energy index in February.
Goods and services
The goods index increased by 0.8% between February 2006 and February 2007, following a drop of 1.0% in the previous month. Non-durable goods posted increases in February, while durable and semi-durable goods fell.
The goods index was pushed upward mainly due to the 2.4% rise in prices for non-durable goods. Gasoline (+2.9%), electricity (+4.0%) and cigarettes (4.3%) were the key factors in the growth of the 12-month change in the non-durable goods index.
The decline in prices for purchasing vehicles (-0.9%) and for computer equipment and supplies (-19.0%) accounted for most of the 1.9% slide in the durable goods index.
The 0.8% drop in the semi-durable goods index was largely attributable to lower prices for men’s clothing (-2.9%) and for toys, games and hobby supplies (-6.2%).
On a month-to-month basis, the goods index rose 1.0% in February 2007, after climbing 0.2% in the previous month. Non-durable goods (+1.4%) and semi-durable goods (+1.3%) posted increases between January and February 2007, while durable good remained unchanged.
Between February 2006 and February 2007, the price of services climbed 3.2%. Most of the rise in the price of services can be attributed to growth in the index of mortgage interest cost (+5.3%) and homeowner replacement cost (+7.1%).
The monthly services index grew a slight 0.4% between January and February 2007, after falling 0.1% in January 2007.
|
