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62-001-XIB Consumer Price Index November 2002 |
Highlights
Twelve-month percentage change in the CPI: +4.3%Twelve-month percentage change in the CPI excluding energy: +3.5%Between November 2001 and November 2002, Canadian consumers experienced a 4.3% increase in the prices of the goods and services included in the Consumer Price Index (CPI) basket. This increase is considerably larger than the 3.2% rise observed in October. But just as in October, this strong increase in the 12-month change is largely attributable to a base effect (see box). Last year, the energy index fell sharply starting in October 2001 after the collapse of worldwide demand for crude oil, causing the All-items index to decline. Energy prices fell 4.4% between September and October 2001 and a further 8.8% between October and November 2001. The gap between the levels of the indexes for November 2001 and November 2002 therefore widened considerably, as shown by the chart below, despite a rise of only 0.2% in the index between October and November 2002. If the index for November 2002 is compared with that of the month before energy prices dropped, namely September 2001, the increase in the CPI is only 2.9%. Without the influence of energy prices, the All-items index nevertheless rose 3.5% between November 2001 and November 2002, whereas it had increased 2.9% from October 2001 to October 2002. All-items Index, Canada
Percentage Change from the Same Month of the Previous Year, CanadaEnergy prices climbed 14.0% between November 2001 and November 2002,
after rising 5.6% from October 2001 to October 2002. This difference between
the two Excluding the influence of the energy component, and therefore the base effect caused by it, the increase in prices compared with November 2001 was 3.5%. Higher automotive vehicle insurance premiums (+22.5%) and higher cigarette prices (+31.9%) were the main source of upward pressure on the All-items CPI in November. Other major factors that contributed to the 12-month increase in the All-items CPI in November were homeowners' replacement cost, rent, prices of restaurant meals, the purchase of automotive vehicles and the price of fresh vegetables. There were few moderating effects, with the greatest one by far being the decrease in mortgage interest cost. Monthly percentage change in the CPI: +0.2%Following October's 0.3% increase, the All-items CPI advanced 0.2% in November. Upward pressures on the CPI in November came mainly from higher prices for automotive vehicles and fresh vegetables, as well as increased automotive vehicle insurance premiums and higher prices for bakery products. However, these increases were offset to some extent by a drop in the prices of traveller accommodation, gasoline, women's clothing and electricity. In November of each year, the sample of automotive vehicles is updated to reflect the arrival of the new models. In November 2002, the index for the purchase of automotive vehicles rose 2.6%. Manufacturers' rebates and discounts offered by dealers were smaller for the new 2003 models in November than they were in recent months for the 2002 models. The prices of fresh vegetables rose 18.6% in November 2002 as imports were brought in to compensate for the supply of some local products running out and North American demand was boosted by the Thanksgiving holiday in the United States. Automotive vehicle insurance premiums rose 3.2%, mainly as a result of rate increases in Ontario, Alberta and New Brunswick. The prices of bakery products rose 3.9% in November, the largest monthly increase since January 1979. This increase was due to the rise over the past three months in the price of wheat, the raw material for the flour used in the making of bakery products. While the price of raw materials represents only a small part of the price of bakery products, the effects of last summer's drought in the Prairies is starting to be reflected in the prices of these products. From October to November 2002, traveller accommodation prices fell by 8.3%. Traditionally, hotel operators lower their rates in the off-season for tourism. Even so, the prices in November 2002 were down 3.4% from their level of a year earlier. Furthermore, the 12-month change in the index has been negative since June 2001. Gasoline prices fell by 1.8% from October to November. This was the first monthly decrease since last June, when prices declined 0.9%. The largest decreases were observed in Saskatchewan (-5.0%) and Quebec (-4.0%). Manitoba (+4.1%) posted the largest increase, attributable to a return to normal prices in Winnipeg after a price war last month. In November, women's clothing prices were 3.6% lower than those of October. Price decreases are common in November, as retailers reduce prices on a wide variety of fall clothing. The 2.2% decline in the electricity index for Canada was entirely attributable to a 5.8% drop in prices in Ontario. Electricity prices in that province were still set on the open market in November, since the Ontario government's new legislation setting the price of electricity at 4.3¢ per kilowatt hour did not come into force until December 1, 2002. For more information on how the changes introduced by the new legislation will be treated in the CPI, see page 5 of this publication. The seasonally adjusted CPI advanced by 0.5% between October 2002 and November 2002After adjusting for seasonal variations, the All-items CPI rose by 0.5% between October and November 2002. All sectors were up, led by food (+0.8%), transportation (+0.8%) and recreation, education and reading (+0.8%). Other sectors such as shelter (+0.3%), household operations and furnishings (+0.3%), alcoholic beverages and tobacco products (+0.2%), health and personal care (+0.1%) and clothing and footwear (+0.1%) rose more slowly. Special AggregatesAll-items excluding the 8 most volatile components (Bank of Canada definition)Between November 2001 and November 2002, the prices of goods and services included in the All-items index excluding the 8 most volatile components as defined by the Bank of Canada rose 3.1%. This rise follows three consecutive increases of 2.5%. Part of the advance from 2.5% to 3.1% is due to a base effect, since the index declined by 0.3% between October and November 2001. The base effect should dissipate in February 2003, since in February 2002 the index had returned to a level comparable to that of October 2001. The All-items index excluding the 8 most volatile components as defined by the Bank of Canada rose 0.2% between October and November 2002. Higher prices for automotive vehicles and automotive vehicle insurance premiums were the main factors contributing to this increase. EnergyIn November 2002, energy prices were 14.0% higher than their level of a year earlier. The prices of all components were higher than in November 2001. Gasoline prices registered the largest increase (+19.0%), followed by natural gas (+14.5%), fuel oil (+11.0%) and electricity (+7.3%). However, it should be kept in mind that these price differences between November 2001 and November 2002 were mainly due to the fact that energy prices dropped suddenly in the fall of 2001. Energy prices dropped 1.6% from October to November 2002, primarily because of lower prices for gasoline (-1.8%) and electricity (-2.2%). Natural gas prices declined by 0.4%, while fuel oil prices rose 0.4%. Goods and ServicesPrices in the goods sector advanced 5.1% between November 2001 and November 2002, mainly because of non-durable goods (+7.8%), where sharply higher prices for gasoline along with higher cigarette prices explained more than half of this 12-month change. Also contributing, although more modestly, to the rise in the goods index was an increase in the prices of durable goods (+1.3%), propelled by higher prices for automotive vehicles, as well as an increase in semi-durable goods prices (+0.6%). Led by automotive vehicle insurance premiums, the cost of services rose 3.8%, reflecting fairly widespread increases. The monthly increase in the goods index was 0.4% between October and November 2002. The non-durable and durable goods indexes contributed equally to this increase. The 0.5% rise in the non-durable goods index was largely due to an increase in the index for food purchased from stores, led by fresh vegetable prices. The 2.2% increase in the index for food purchased from stores was the largest since January 1998. However, this increase was partly offset by lower prices for gasoline and electricity. The durable goods index rose 1.3%, mainly as a result of higher prices for automotive vehicles. In the goods category, only the prices of semi-durable goods were down (-1.6%), with widespread declines in women's clothing prices. From October to November 2002, the cost of services was up 0.2%. This was primarily a result of higher automotive vehicle insurance premiums, which were in part offset by lower prices for traveller accommodation and air transportation. |
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