Analysis

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Consumer prices rose 1.0% in the 12 months to November, following a 0.1% increase in October.

The rise in the all-items Consumer Price Index (CPI) was due primarily to gasoline prices. Prices at the pump are now exerting upward pressure on the CPI after an extended period in which they were the main contributors to year-over-year declines in overall consumer prices.

In November 2009, gasoline prices were 14.1% higher than they were in November 2008. This follows a 13.1% decline between October 2008 and October 2009.

Overall, energy prices rose 1.3% between November 2008 and November 2009, following a 12.7% decline the month before.

12-month change: Seven of the eight major components in the CPI recorded increases

Except for shelter, all major components of the CPI recorded price increases in November. Three components exerted the greatest upward pressure on the CPI: transportation; household operations, furnishings and equipment; and food.

Transportation prices, which rose 1.9% in the 12 months to November, exerted the largest upward pressure on the CPI due primarily to higher gasoline prices. It was the first 12-month increase for this component since October 2008.

In addition to higher prices at the pump, consumers paid 7.8% more for passenger vehicle insurance premiums. However, prices for passenger vehicles were 6.0% lower than the same period last year.

The cost of household operations, furnishing and equipment rose 2.8% during the 12-month period to November. Upward pressure came from communications, child care and domestic services, furniture and household textiles, household appliances, and other household goods and services.

Food prices gained 1.7%, following a 2.3% increase in October. November’s increase was the smallest since April 2008.

Prices for dairy products and eggs rose 2.1% while prices for fish, seafood and other marine products rose 5.4%. Prices for food purchased from restaurants went up 2.7%. On the other hand, prices fell for fresh fruit (-5.7%) and fresh vegetables (-5.9%).

Recreation, education and reading costs advanced 1.8% in the 12 months to November. Major contributors to the increase were tuition fees and reading material and other printed material. In contrast, prices for computer equipment and supplies and other electronic equipment items such as video, audio, and photographic equipment continued to fall.

Broad-based price advances occurred in the health and personal care component (+3.2%).

Shelter costs declined 1.7% between November 2008 and November 2009. This drop was mainly the result of price decreases in natural gas (-29.7%) and fuel oil and other fuels (-10.6%). Unlike gasoline, prices for natural gas and fuel oil and other fuels were still exerting downward pressure on the CPI in November.

Downward movements from homeowners’ replacement cost (-2.1%) and mortgage interest cost were also recorded.

The mortgage interest cost index, which measures the change in the interest portion of payments on outstanding mortgage debt, fell 4.0% in November, following a 3.1% decrease in October.

On the other hand, homeowners’ maintenance and repairs costs and property taxes both increased by 4.3% in November.

Provinces: Consumer prices up in all provinces

Consumer prices rose in all provinces in the 12 months to November. The largest increases occurred in New Brunswick (+2.2%), Prince Edward Island (+1.9%), Nova Scotia (+1.7%), and Quebec (+1.7%).

Consumers in all Atlantic provinces incurred price increases between November 2008 and November 2009. Increases in the all-items CPI in these provinces were mostly due to higher gasoline prices and less downward pressure from fuel oil and other fuels.

Price increases in Quebec were driven by higher prices for gasoline and food purchased from restaurants.

In Ontario, prices rose 1.0%. This growth was primarily due to the rise in gasoline prices (+17.5%) and passenger vehicle insurance premiums (+11.6%). Price decreases for natural gas eased the upward pressure.

Prices in British Columbia gained 0.1%. This was the first 12-month increase in the province since May 2009.

Month-over-month seasonally unadjusted CPI increases

Consumer prices prior to seasonal adjustment rose 0.5% from October to November, after decreasing 0.1% from September to October.

Upward pressure on the monthly CPI came mainly from higher prices for transportation (+1.8%) and food (+1.2%).

Increases in the transportation index were mainly due to upward price movements for passenger vehicles (+5.0%) and gasoline (+3.2%).

In November of each year, models of automotive vehicles from the current year (2009) are replaced by new models (2010) in the CPI sample. As a result, the purchase of passenger vehicles price index in November reflected prices for 2010 vehicle models.

Monthly increases in food were driven by fresh vegetables (+16.3%) and fresh fruit (+2.9%). Prices for non-alcoholic beverages rose 2.7%.

Other major components in the CPI recording increases: household operations, furnishings and equipment; shelter; health and personal care; and clothing and footwear.

On the other hand, price declines in recreation, education and reading (-0.8%) and alcoholic beverages and tobacco products (-0.1%) tempered the overall increase in the monthly CPI in November.

Declines in the recreation, education and reading index were mainly due to price drops in traveller accommodation (-7.1%) and computer equipment and supplies (-2.3%) in November.

Seasonally adjusted monthly CPI increases

On a seasonally adjusted monthly basis, the CPI went up 0.6% from October to November, after rising 0.4% from September to October. November’s increase was due mainly to a 1.8% rise in the transportation index.

The seasonally adjusted monthly CPI has gone up in six of the past seven months.

12-month change in the Bank of Canada’s core index

The Bank of Canada's core index advanced 1.5% over the 12 months to November, following a 1.8% rise in October.

On a month-to-month basis, the core index prior to seasonal adjustment increased 0.4% from October to November.

The seasonally adjusted monthly core index increased 0.2% from October to November, following a 0.3% increase in October.