Canada December Consumer Price Index Report (Text)

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

The Consumer Price Index (CPI) rose 0.8% in the 12 months to December, matching the increase in November.

12-month change in the major components

Consumer prices rose in all major components in the 12 months to December.

Food prices rose 1.5% on a year-over-year basis in December following a 1.7% increase in November. Consumers paid 2.2% more for food purchased from restaurants and 4.4% more for meat. In contrast, prices declined 5.8% for fresh vegetables.

Prices for household operations, furnishings and equipment increased 1.3% year over year in December, as consumers paid 4.2% more for financial services.

Shelter costs increased 0.6% in the 12 months to December after rising 1.0% in November. Rent and homeowners’ replacement cost increased on a year-over-year basis. Conversely, mortgage interest cost and natural gas prices declined.

Prices for transportation increased 0.5% in the 12 months to December, after decreasing 0.2% in November. Gasoline prices rose 1.0% on a year-over-year basis in December compared with a 0.4% increase in November. Prices for the purchase of passenger vehicles fell 0.6% in the 12 months to December after decreasing 1.8% in November.

12-month change in the provinces

Consumer prices rose in all provinces in the 12 months to December, except Alberta which posted no change in its All-items CPI. The largest increase occurred in Nova Scotia.

Chart: Prices grow at the fastest rate in Nova Scotia while Alberta posts no price change

Consumer prices in Nova Scotia increased 1.8% on a year- over-year basis in December, after rising 1.2% in November. Nova Scotia posted the largest year-over-year price increase among the provinces for electricity, homeowners’ home and mortgage insurance and clothing.

The All-items CPI in Alberta posted no change in the 12 months to December following a 0.6% increase the previous month. Alberta was the only province to post a year-over-year price decrease for electricity.

Prices in British Columbia rose 0.4% year over year in December, compared with a 0.1% increase in November. Smaller year-over-year price decreases for gasoline were observed in December compared with November.

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 December after declining 0.2% in November.

In December, five of the eight major components posted no price change while the indexes for clothing and footwear, and health and personal care edged up. The seasonally adjusted index for transportation declined 0.3% in December following a 1.2% decrease in November.

Bank of Canada’s core index

The Bank of Canada’s core index (http://www.statcan.gc.ca/pub/62-001-x/2012012/technote- notetech2-eng.htm) rose 1.1% in the 12 months to December, following a 1.2% advance in November.

On a monthly basis, the seasonally adjusted core index increased 0.1% in December after registering no change in November.

Annual review of the 2012 Consumer Price Index

In 2012, the annual average increase in consumer prices was 1.5%. This followed a 2.9% rise in 2011 and a 1.8% rise in 2010. The 2012 increase in the CPI was the lowest since 2009, when prices increased 0.3%. The average of the annual increases in the CPI since 1992 is 1.8%.

The slower increase in the CPI in 2012 compared with 2011 was largely attributable to smaller price increases for gasoline and food. Gasoline prices increased 2.5% in 2012 following gains of 20.0% in 2011 and 9.1% in 2010. Food prices rose 2.4% on average in 2012 after increasing 3.7% in 2011.

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 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.

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 (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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