Analysis
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The Consumer Price Index (CPI) rose 1.2% in the 12 months to June, following a 0.7% increase in May. This 0.5 percentage point increase in the CPI was led by transportation prices which rose 2.0% on a year-over-year basis in June, after falling 0.5% in May.
The acceleration in the transportation index was mostly attributable to prices for gasoline and for the purchase of passenger vehicles, both of which rose in the 12 months to June after declining in the previous month.
Compared to June last year, gasoline prices increased 4.6%. This followed a 1.5% decrease in May. Gasoline prices increased in the 12 months to June in all provinces, with Manitoba and Alberta posting the largest gains.
Prices for the purchase of passenger vehicles rose 2.0% in the 12 months to June, after declining 0.5% in May. The year-over-year increase in June was mainly attributable to smaller monthly price declines in June 2013 compared with the same month last year.
12-month change in the major components
Consumer prices rose in six of the eight major components in the 12 months to June. The exceptions were health and personal care, and recreation, education and reading. In addition to transportation, the shelter and food components led the increase in the CPI in June.
Shelter costs rose 1.2% in the 12 months to June, after increasing 1.3% in May. Natural gas prices and rent increased on a year-over-year basis in June, while mortgage interest cost decreased 3.8%.
Food prices increased 1.2% year over year in June, following a 1.3% rise in May. Compared with June 2012, consumers paid 1.3% more for food purchased from stores, as prices rose for fresh vegetables (+5.1%) and meat (+2.2%). In contrast, prices for sugar and confectionery declined 4.3%.
Consumers also paid 1.1% more for food purchased from restaurants.
12-month change in the provinces
Consumer prices rose in nine provinces in the 12 months to June with the largest increase occurring in Manitoba. The exception was British Columbia, where prices declined on a year-over-year basis.
In Manitoba, consumer prices increased 2.7% year over year in June, following a 1.8% increase in the previous month. Gasoline prices rose 10.7% in the 12 months to June, after increasing 0.9% in May. Among the provinces, Manitoba posted the largest year-over-year price increase for cigarettes and for passenger vehicle registration fees.
Alberta’s CPI rose 2.3% on a year-over-year basis in June, matching the increase in the previous month. Gasoline prices advanced at a faster rate in the 12 months to June (+9.2%) compared with May (+1.6%). Conversely, smaller year-over-year price increases were observed for natural gas in June relative to May.
Prices in British Columbia fell 0.5% in the 12 months to June, after declining 0.6% in May. The province posted year-over-year price decreases for food purchased from restaurants and homeowners’ replacement cost, while at the national level these indexes increased. Additionally, gasoline prices rose 3.2% year over year in June, after increasing 1.4% in May, a smaller acceleration than at the national level.
Seasonally adjusted monthly CPI increases
On a seasonally adjusted monthly basis, the CPI increased 0.3% in June, after rising 0.2% in May.
The seasonally adjusted indexes for six of the eight major components posted increases in June. The two exceptions were alcoholic beverages and tobacco products, which declined 0.1%, and clothing and footwear, which posted no change. The transportation index rose 1.6% in June, following a 0.2% increase in May.
Non-seasonally adjusted monthly CPI posts no change
On a monthly basis and before seasonal adjustment, the CPI posted no change in June, after increasing 0.2% in May.
Gasoline prices rose 2.8% in June, following a 1.1% rise in the previous month.
Prices for clothing and footwear fell 2.9% in June led by price decreases for women’s clothing (-3.4%) and men’s clothing (-4.5%).
On a provincial basis, consumer prices increased the most in Manitoba (+0.5%), and declined the most in British Columbia (-0.3%).
Bank of Canada’s core index
The Bank of Canada’s core index rose 1.3% in the 12 months to June, following a 1.1% increase in May.
On a month-to-month basis and before seasonal adjustment, the core index declined 0.2% in June, after increasing 0.2% in May.
On a monthly basis, the seasonally adjusted core index increased 0.2% in June, after posting no change in the previous month.
Note to readers
A seasonally adjusted series is one from which seasonal movements have been eliminated. Users employing Consumer Price Index data for indexation purposes are advised to use the unadjusted indexes. For more information on seasonal adjustment, see Seasonal adjustment and identifying economic trends.
The Bank of Canada’s core index excludes eight of the Consumer Price Index’s most volatile components (fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuels; gasoline; inter-city transportation; and tobacco products and smokers’ supplies) as well as the effects of changes in indirect taxes on the remaining components.
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