July saw the highest 12-month increase since March 2003. A climb in gasoline prices was the primary source of higher consumer prices in July. The 12-month variation in the Consumer Price Index (CPI) and the gasoline price index have been increasing at a faster pace over the past four months.
Consumer prices excluding gasoline advanced 2.1per cent, up from the 1.8 per cent 12-month rate of growth posted for June.
Lower prices to purchase and lease passenger vehicles partially offset the impact of rising gasoline prices and eased the overall increase in transportation costs for consumers.
12-month change: Consumers continue to feel the pinch of higher gasoline prices
Gasoline prices were the main factor behind the climb in consumer prices from July 2007 to July 2008.
Prices at the pump rose 28.6 per cent in the 12 months to July 2008. While gasoline prices continued to rise, the overall increase in transportation costs was partially offset by lower prices to purchase and lease passenger vehicles, which fell 8.9 per cent in July compared with the same month a year earlier. Overall, transportation costs rose by 6.1 per cent in the 12 months to July 2008.
The mortgage interest cost index advanced 8.5 per cent from July 2007 to July 2008, down from the 9.0 per cent increase posted in the 12 months to June. The slowdown in the rise in mortgage interest cost was due more to a softening of new housing prices rather than to lower mortgage interest rates.
Higher natural gas prices (+25.0 per cent) also contributed to the rise in consumer prices in July. The increase in natural gas prices was partly due to a decline in prices that occurred at the same time last year and to recent increases related to oil prices.
Prices for fuel oil and other fuels, products which are derived from oil, also put significant upward pressure on consumer prices in July.
A 4.3 per cent rise in prices for food purchased from stores, led by a 13.2 per cent rise in prices for bakery products, continued to exert upward pressure on consumer prices in July. Price increases for other food products closely related to grain, such as breakfast cereal, rice, pasta and flour and flour based mixes, continued to increase in the 12 months to July 2008.
The drop in prices to purchase and lease passenger vehicles helped to offset the rise of the all-items index in July. Competition among vehicle manufacturers remains strong as manufacturers compete for market share by increasing incentives.
Prices for computer equipment and supplies continued to fall in July (-12.0 per cent), although the decline was the smallest since August 2003. Prices for other electronic equipment items such as video equipment and photographic equipment and supplies also continued their downward trend in July.
The provinces: The three most eastern provinces bear the brunt of increasing consumer prices
Consumers in Prince Edward Island (+5.3 per cent), Newfoundland and Labrador (+4.2 per cent) and Nova Scotia (+4.2 per cent) faced the largest consumer price increases.
Gasoline prices contributed largely to the rise in consumer prices observed across the country. Gasoline prices rose the most in British Columbia (+31.5 per cent).
Other provinces, especially those in Central Canada, also posted strong price increases for gasoline. In Ontario, gasoline prices rose 30.1 per cent and in Quebec they increased 30.9 per cent.
Besides higher prices for gasoline, price increases for other energy components, such as fuel oil and other fuels and electricity, rose sharply in Newfoundland and Labrador, Prince Edward Island and Nova Scotia in the 12 months to July. The rise in these energy components largely accounted for the growth in consumer prices posted in these provinces.
In Alberta, it was higher costs for owned accommodation that primarily pushed up consumer prices 3.5 per cent in the 12 months to July. This was a substantial slowdown from the 4.4 per cent rate of growth posted in June.
While consumers across the country faced higher prices for gasoline and mortgage interest costs, lower prices to purchase and lease passenger vehicles helped to offset these price increases. Changes in prices to purchase and lease passenger vehicles ranged from a 7.6 per cent decrease in Quebec to an 11.4 per cent decline in New Brunswick.
|
