Bloomberg News

Canada January Consumer Price Index Report (Text)

February 22, 2013

The following is the text of Canada’s consumer price index report for January released by Statistics Canada.

The Consumer Price Index (CPI) rose 0.5% in the 12 months to January, following a 0.8% gain in December. The main factor in the smaller increase in the CPI was gasoline prices, which fell 1.8% year-over-year in January after rising 1.0% in December.

Provincially, the largest year-over-year decreases in gasoline prices occurred in Saskatchewan (-8.8%) and Alberta (- 7.3%), while Prince Edward Island (+1.5%) was the lone province to record an increase.

Excluding gasoline, the CPI increased 0.6% in the 12 months to January after rising 0.8% in December. This slower increase was led by year-over-year price declines for clothing and smaller price gains for food purchased from stores.

12-month change in the major components

Consumer prices rose in six of the eight major components in the 12 months to January. The exceptions were transportation as well as clothing and footwear.

Food prices increased 1.1% on a year-over-year basis in January following a 1.5% advance in December. This slower rise was mainly attributable to easing price increases for food purchased from stores, notably meat. January’s 0.6% year-over- year advance in the food purchased from stores component was the smallest since July 2010.

Shelter costs rose 0.6% in the 12 months to January, matching the increase in December. Rent and homeowners’ replacement cost was up on a year-over-year basis. Conversely, mortgage interest cost decreased 4.2%.

Prices for transportation declined 0.5% in the 12 months to January, after increasing 0.5% in December. In addition to a year-over-year price decrease for gasoline, prices for the purchase of passenger vehicles fell 0.8%.

Prices for clothing and footwear fell 1.6% on a year-over- year basis in January following a 0.1% increase the previous month. The decline in clothing and footwear prices was attributable to more sale prices in January 2013 compared with January 2012.

12-month change in the provinces

Consumer prices rose in all provinces in the 12 months to January, except in Alberta.

Consumer prices in Alberta fell 0.5% in the 12 months to January following no price change the previous month. This decline was led by electricity prices, which were 29.5% below the historical highs recorded in January 2012.

In Nova Scotia, consumer prices rose 1.4% on a year-over- year basis in January, the largest increase among the provinces. The province also had the largest year-over-year price advance for homeowners’ home and mortgage insurance.

Prices in Prince Edward Island rose 1.3% in the 12 months to January following a 1.2% increase the previous month. Prince Edward Island was the only province where the All-items CPI increased at a faster rate in January than in December, led by a year-over-year advance in fuel oil prices.

In Quebec, consumer prices rose 0.6% on a year-over-year basis in January, after increasing 1.5% in December. The slower rise was led by gasoline prices, which fell 1.5% in the 12 months to January after advancing 1.8% in December. The year- over-year decrease in the purchase of passenger vehicles index was also a factor.

Seasonally adjusted monthly CPI decreases

On a seasonally adjusted (http://www23.statcan.gc.ca:81/imdb/p2SV.pl?Function=getSurvey&a mp;SDDS=2301&lang=en&db=imdb&adm=8&dis=2#b10) monthly basis, the CPI decreased 0.1% in January after posting no change in December.

The seasonally adjusted index for transportation declined 0.2% in January following a 0.5% decrease in December. The clothing and footwear index decreased 0.8% in January and the food index fell 0.1%. Conversely, the indexes for shelter, household operations, furnishings and equipment as well as alcoholic beverages and tobacco products increased.

Bank of Canada’s core index

The Bank of Canada’s core index (http://www.statcan.gc.ca/pub/62-001-x/2013001/technote- notetech2-eng.htm) rose 1.0% in the 12 months to January, following a 1.1% gain in December.

On a monthly basis, the seasonally adjusted core index rose 0.1% in January, matching the increase in December.

Note to readers

On March 27, 2013, with the release of the February Consumer Price Index (CPI), the basket of goods and services used in the calculation of the CPI will be updated. For more information, refer to Consumer Price Index: Basket update and Enhancement Initiative. (http://www23.statcan.gc.ca/imdb- bmdi/document/2301_D52_T9_V1-eng.htm)

The Bank of Canada’s core index excludes eight of the CPI’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.

A seasonally adjusted series is one from which seasonal movements have been eliminated. Users employing CPI data for indexation purposes are advised to use the unadjusted indexes. For more information on seasonal adjustment, see Seasonal adjustment and identifying economic trends (http://www5.statcan.gc.ca/bsolc/olc-cel/colc-cel?catno=11-010- X201000311141&lang=fra) .

To contact the reporter on this story: Ilan Kolet in Ottawa at ikolet@bloomberg.net

To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net


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