Inflation up 1.9% in 2009, mainly on higher fuel costs
Thursday, February 18, 2010 at 10:49AM Canada's inflation rate rose 1.9% in the twelve months to January, following a 1.3% rise in December, 2009, Statistics Canada reported today. The increase in the Consumer Price Index (CPI) is mainly due to gasoline prices, which in January were 23.9% higher than twelve months ago. Energy prices overall rose 8.2% between January, 2009 and January, 2010.
Six of the major components of the CPI showed increases during the twelve-month period: the exceptions were shelter, and clothing and footwear. Shelter costs declined 1.1% as a result of lower mortgage interest costs, and natural gas prices. Women's and children's clothing prices were down 6.8% and 4.8% respectively.
The transportation component of the CPI exerted the strongest upward pressure, increasing by 7.7% in the twelve months to January. Not only gas prices, but also insurance premiums and passenger vehicles cost more.
Food prices, especially food bought in restaurants (up 2.6%), and non-alcoholic beverages (up 7.2%), pushed the CPI higher. By contrast, prices for fresh fruit, vegetables and meat fell in the same period.
Household operations, furnishing and equipment prices rose 2.1%, while health and personal care were up 3.1%.
Recreation, education and reading increased 1.4% in the twelve months to January, with tuition fees and cablevision services contributing most to the increase. Prices for home entertainment equipment, parts and services and computer equipment fell during the same period.
The price rises were spread across all provinces, the largest being in Atlantic Canada where the highest year-over-year increase was 4.0% in PEI, again, largely due to higher gasoline prices. Atlantic Canada saw gasoline price increases of from 26.5% in Newfoundland and Labrador to 35.6% in New Brunswick, during the twelve months from January, 2009. Fuel oil and other fuels also rose 9.7%, having a bigger effect on Atlantic Canada than elsewhere because the rest of the country relies more on electricity and natural gas.
The Bank of Canada's core index, which excludes what the Bank defines as "volatile" items such as gasoline and mortgage interest rates, rose 2.0% over the twelve months to January, mainly due to increased prices in the cost of passenger vehicles.
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