Highlights
Twelve-month percentage change in the CPI: +2.0%
Twelve-month percentage change in the CPI excluding energy: +1.6%
The 12-month increase in the Consumer Price Index (CPI) eased to 2.0%
in August from 2.2% in July. August’s 12-month increase was well
below the recent peak of 4.6% reached in February 2003 and was the lowest
since July 2002. Excluding energy, the CPI advanced by 1.6% from August
2002 to August 2003, after rising 1.8% in July.
Automotive vehicle insurance premiums, as well as natural gas and gasoline
prices were primarily responsible for the 12-month increase in the All-items
CPI. Homeowners’ replacement cost, last September’s tuition
fees, homeowners’ insurance premiums, as well as prices for cigarettes
and food purchased from restaurants also contributed to the 12-month
increase.
Percentage Change from the Same Month of the Previous Year, Canada
Insurance premiums for automotive vehicles rose 21.8% between August 2002
and August 2003. Most of this increase occurred in the first half of the
12-month period. The industry cites rising health care costs, larger claim
payouts, fraud and falling returns on its investments as contributing factors.
The natural gas index was 51.4% higher than in August 2002, mostly the
result of higher prices in Ontario (+49.5%) and the effects of a payment
to Northern Alberta customers following the sale of a gas field last year.
The natural gas index for Alberta was lowered by this payment between March
and September 2002. A substantial monthly increase (+9.0%) left gasoline
prices 6.3% higher than in August 2002.
A 12-month decrease in electricity prices (-8.4%) had a small moderating
effect on the CPI’s 12-month increase. Downward pressure also came
from lower prices for traveller accommodation, the purchase of automotive
vehicles and beef.
Traveller accommodation prices were 13.6% below last August’s
levels as the tourism industry continued to face the effects of a higher
Canadian dollar, the severe acute respiratory syndrome (SARS) outbreak
and a general economic slowdown. Prices for the purchase of automotive
vehicles fell 1.9% in August 2003 compared to August 2002 as manufacturers
continued to offer additional incentives. Beef prices were down 9.5%,
the result of trade restrictions on Canadian beef by the United States
and other countries.
Monthly percentage change in the CPI: +0.2%
Monthly percentage change in the CPI excluding energy: -0.1%
After three consecutive monthly increases of 0.1%, the CPI continued
its slow moving upward trend, rising by 0.2% between July and August
2003. A 9.0% increase in the price of gasoline accounted for nearly all
of the upward pressure on the index. This upward pressure was almost
entirely offset by price decreases for fresh vegetables, automotive vehicle
purchases and beef.
Gasoline prices rose on average by 9.0% between July and August. This
was the highest monthly advance since March 2002. Gasoline prices were
up in all provinces and increases ranged from a low of 2.7% in Newfoundland
and Labrador to a high of 11.1% in both British Columbia and Ontario.
Increases were due to reduced gasoline inventories in the United States
and high summer demand.
Consumers paid 12.1% less for fresh vegetables as more locally grown
produce became available.
Prices for the purchase of automotive vehicles were down by 0.8%
in August, following decreases in June and July. Automotive vehicle
manufacturers
continue to push sales by offering incentives. The index for the
purchase of automotive vehicles has fallen 4.4% since the beginning
of 2003.
Beef prices fell for the fourth consecutive month, decreasing by 8.3%
in August. Since May, prices have dropped by 13.9% and are now at their
lowest levels since January 2001. Price reductions were primarily the
result of trade restrictions on Canadian beef by the United States and
other countries which followed the May 20 discovery of a case of bovine
spongiform encephalopathy (BSE) in Alberta. Price declines were seen
in Western and Central Canada while most Maritime Provinces showed increases.
The seasonally adjusted CPI increased by 0.3% between July and August
2003
After adjusting the CPI to remove seasonal influences, the All-items
CPI showed a 0.3% rise between July and August 2003. This increase is
attributable to the rise in the seasonally adjusted indexes for transportation
(+1.8%), alcoholic beverages and tobacco products (+0.4%), health and
personal care (+0.3%), shelter (+0.1%), recreation, education and reading
(+0.1%), and household operations and furnishings (+0.1). These increases
were partially offset by the decrease in the seasonally adjusted index
for clothing and footwear (-0.3%). The index for food was unchanged after
seasonal adjustment.
Special aggregates
All-items excluding the eight most volatile components (Bank of Canada
definition)
The All-items index excluding the eight most volatile components as
defined by the Bank of Canada rose by 1.5% between August 2002 and August
2003. This follows a 12-month increase of 1.8% in July. The main contributors
to August’s rise were higher automotive vehicle insurance premiums
(+21.8%) and homeowners’ replacement cost (+6.2%), as well as the
increase in tuition fees (+4.8%) registered last September.
The All-items index excluding the eight most volatile components as
defined by the Bank of Canada increased 0.2% between July and August.
Most of the upward pressure came from higher automotive vehicle insurance
premiums. Downward pressure came from lower automotive vehicle purchase
costs and beef prices. On a seasonally adjusted basis, the index remained
unchanged between July and August.
Energy
Consumers paid 7.6% more for energy in August 2003 than in August 2002.
Most of this increase is attributable to the rise in the price of natural
gas (+51.4%) and gasoline (+6.3%). Higher prices for fuel oil (+10.5%)
also contributed to the increase, while lower prices for electricity
(-8.4%) exerted some moderating downward pressure.
In August 2003, energy prices were 4.3% higher than the previous month.
This increase was due to higher gasoline prices (+9.0%) and, to a much
lesser extent, higher prices for electricity (+0.3%). Lower natural gas
prices (-1.1%) exerted some modest downward pressure.
Goods and Services
Prices for goods edged up 0.9% from August 2002 to August 2003, after
recording a 12-month increase of 1.0% in July. August’s increase
in entirely due the advance in the non-durable goods index (+3.5%), which
stemmed primarily from higher prices for natural gas and gasoline. Drops
in prices for electricity, beef and fresh vegetables served to offset
these increases somewhat. The durable goods category fell 1.7%, owing
in large part to decreases in the purchase price of automotive vehicles.
The semi-durable goods index also decreased (-2.8%) due mostly to lower
prices for women’s and men’s clothing, as well as for footwear
and children’s clothing.
Once again the service sector was the main cause of the upward pressure
on the All-items index, rising 3.1% between August 2002 and August 2003.
Increases in automotive vehicle insurance premiums, homeowners’ replacement
cost and tuition fees were partially offset by a decrease in the price
of traveller accommodation and air transportation.
On a monthly basis, the goods index climbed 0.3% between July and August.
The non-durable goods sector led the increase (+0.7%), while prices for
semi-durable goods edged up by 0.3% and durable goods prices slipped
by 0.5%. Non-durable goods prices moved up on the strength of gasoline,
with lower fresh vegetable and beef prices partially offsetting this
advance. The increase in the semi-durable goods category was due primarily
to women's clothing prices, while the durable goods index slipped largely
due to lower prices for the purchase of automotive vehicles.
In August 2003, the services index registered a 0.2% monthly increase
for a third consecutive month.
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