Analysis

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The Consumer Price Index (CPI) rose 1.2% in the 12 months to February, following a 0.5% increase in January. This 0.7 percentage point increase in the 12-month change was led by transportation prices which rose 2.0% on a year-over-year basis in February, after falling 0.5% in January.

The rise in the transportation index was attributable to price increases for gasoline and for the purchase of passenger vehicles, both of which rose in the 12-months to February after declining in January.

Gasoline prices advanced 3.9% year over year in February following a 1.8% decrease in January. On a monthly basis, gasoline prices rose 8.4% in February, the largest monthly increase since May 2008.

The purchase of passenger vehicles index rose 2.5% in the 12 months to February, after declining 0.8% in January. The acceleration in this index was mostly attributable to a notable monthly increase in February. Fewer manufacturers’ rebates were available in February compared to January.

12-month change in the major components

Consumer prices rose in seven of the eight major components in the 12 months to February. The exception was clothing and footwear.

Food prices increased 1.9% on a year-over-year basis in February following a 1.1% rise in January. Consumers paid more for food purchased from stores, particularly meat (+3.1%) and fresh fruit (+6.7%). In contrast, prices for non-alcoholic beverages declined 4.2%. Consumers also paid 2.2% more for food purchased from restaurants.

Shelter costs rose 0.8% in the 12 months to February, after increasing 0.6% in January. Rent and homeowners’ replacement cost advanced on a year-over-year basis, while mortgage interest cost decreased 4.2%.

Energy prices

Energy prices advanced 2.0% year over year in February, after falling 1.7% in the previous month. In addition to gasoline, prices for fuel oil rose 4.1% on a year-over-year basis in February, following a 0.8% decrease in January. Natural gas prices were up 0.6% in the 12-months to February; the first increase since December 2010.

12-month change in the provinces

In all provinces, consumer prices rose at a faster year-over-year rate in February compared with January, led primarily by price increases for gasoline and for the purchase of passenger vehicles.

The largest increase in consumer prices was in Newfoundland and Labrador, while the smallest occurred in Alberta and British Columbia.

In Newfoundland and Labrador, consumer prices rose 2.3% on a year-over-year basis in February, after registering a 0.9% increase in January. The province posted year-over-year price increases for electricity, clothing, and passenger vehicle insurance premiums, while at the national level these indexes declined.

Consumer prices in Alberta rose 0.9% in the 12 months to February following a 0.5% decline in the previous month. Natural gas prices increased 20.8% year over year in February. In addition, gasoline prices advanced 3.8% in the 12 months to February, after declining 7.3% in January, a larger acceleration than at the national level.

In British Columbia, consumer prices rose 0.9% on a year-over-year basis in February, after increasing 0.3% in January. The smaller increase in British Columbia’s CPI relative to Canada’s was partly due to homeowners’ replacement cost, which decreased 2.7% in the province.

Seasonally adjusted monthly CPI increases

On a seasonally adjusted monthly basis, the CPI increased 0.7% in February after posting no change in January. The February increase was the largest since June 2008.

Seven of the eight major components posted increases in February. The exception was health and personal care which registered no change. The seasonally adjusted index for transportation increased 2.4% in February following a 0.1% decrease in January. The clothing and footwear index and the food index both increased 0.9% in February.

Non-seasonally adjusted monthly CPI increases

On a monthly basis and before seasonal adjustment, the CPI advanced 1.2% in February. This followed monthly decreases in November and December, and a 0.1% rise in January.

Gasoline prices rose 8.4% in February, following a 0.1% decline in January. Additionally, consumers paid 2.1% more for the purchase of passenger vehicles in February.

Prices for clothing and footwear increased 4.0% in February after decreasing 1.5% in January. Prices increased for women’s clothing (+5.7%) and men’s clothing (+5.2%). Fewer discounts were observed in February compared with January.

Food prices rose 1.0% in February, following a 0.3% increase in January. Prices for fresh vegetables increased in February, influenced by unusually cold weather in crop producing regions of California. Consumers also paid more for dairy products.

On a provincial basis, consumer prices rose in all provinces in February. The largest increase in prices occurred in Newfoundland and Labrador (+1.8%), while the smallest occurred in Alberta (+0.9%).

Bank of Canada’s core index

The Bank of Canada’s core index rose 1.4% in the 12 months to February, following an increase of 1.0% in January.

On a month-to-month basis and before seasonal adjustment, the core index increased 0.8% in February after increasing 0.1% in January.

On a monthly basis, the seasonally adjusted core index increased 0.4% in February, after increasing 0.1% in January.