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Tuesday, October 26, 2004 Consumer Price IndexSeptember 2004In September 2004, Canadian consumers paid 1.8% more than in September 2003 for the goods and services included in the Consumer Price Index (CPI) basket, following a 1.9% increase in August 2004. The 12-month variation in the All-items index excluding energy declined slightly from 1.5% in August to 1.4% in September. The All-items index excluding the eight volatile components identified by the Bank of Canada rose by 1.5% between September 2003 and September 2004, the same increase as that recorded in August 2004. Between August and September, the CPI rose by 0.1%, mainly as a result of an increase in women's clothing prices. On a monthly basis, the All-items index excluding the eight volatile components identified by the Bank of Canada was up 0.3%, following a 0.2% decrease in August. Main contributors to the 12-month increase in the CPIIn September, the CPI registered a 1.8% increase over September 2003. Upward pressure was exerted primarily by gasoline prices, homeowners' replacement cost, as well as prices for cigarettes, restaurant meals, beef and electricity. These increases were nonetheless attenuated by lower prices for the purchase and leasing of automotive vehicles; computer equipment and supplies; video equipment; and natural gas. Gasoline prices were up 7.2% from September 2003. Increases were observed in all provinces, with the highest in Prince Edward Island (+14.4%) and the lowest in Saskatchewan (+1.8%). Homeowners' replacement cost, which represents the worn out structural portion of housing and is estimated using new housing prices (excluding land), rose 6.8% from September 2003. Manitoba registered the highest increase (+8.5%) and New Brunswick the lowest (+1.9%). Strong demand in the housing market as well as higher material and labour costs across Canada were the main factors behind this increase. Increases in tobacco taxes over the last 12 months explain most of the 7.6% rise in cigarette prices since September 2003, although higher tobacco prices and transportation costs also contributed. Restaurant meal prices increased 2.6% between September 2003 and September 2004. In September, beef prices were up 18.9%. The September 2004 index was compared with that of September 2003, which was abnormally low as a result of the discovery of a case of bovine spongiform encephalopathy (BSE) in Alberta on May 20, 2003. Electricity prices were 4.4% higher than 12 months before. Newfoundland and Labrador (+10.0%) and British Columbia (+6.5%) posted the largest increases, while rates in Alberta declined (-1.4%). Among the factors contributing to moderating the 12-month increase in the All-items index, was the index for the purchase and leasing of automotive vehicles which declined 2.0% in September 2004, following financial incentives offered in the last 12 months. Prices for computer equipment and supplies have fallen 13.7% since September 2003. Prices for video equipment were 8.5% lower in September 2004 compared with September 2003. British Columbia showed the most substantial decrease (-12.7%) and Saskatchewan the least significant (-2.8%). A 2.3% reduction in natural gas prices also contributed towards moderating the increase in the All-items index for September 2004. Decreases in Ontario (-7.2%), British Columbia (-3.1%) and Quebec (-1.1%) accounted for the reduction in the price index for natural gas, despite the increases reported in other provinces. Slight increase in the CPI from August to SeptemberFrom August to September, the CPI rose by 0.1%. The increase in women's clothing prices, tuition fees, as well as in prices for fuel oil and men's clothing was moderated by lower prices for gasoline, automotive vehicle purchases and fresh vegetables. The new fall-winter clothing collections were introduced in the stores, pushing up the index for women's (+6.2%) and for men's (+2.2%) clothing. Tuition fees were collected in September for the 2004/05 school year. On average, students experienced a 4.2% increase, less than the 8.1% rise registered in September 2003. The tuition fee index for a province takes into account that some residents of one province are studying in institutions in another province. Advances ranged from 0.6% for residents of Quebec and 13.0% for those of British Columbia. Canadians paid 5.6% more for fuel oil in September 2004. Concerns over the world supply capacity caused by factors such as confrontations in Nigeria and the strike in Norway had an affect on fuel oil prices. From August to September 2004, gasoline prices continued their downward trend for a fourth consecutive month, falling 1.2%. Automotive vehicle prices fell 0.7% on average in September. Similar declines occurred in all regions of Canada. At this time of year, manufacturers increase incentive programs to help reduce inventories before the new models arrive. Consumers still had access to Canadian vegetables and enjoyed a 5.8% decrease in fresh vegetable prices in September 2004. Lower prices for "other fresh vegetables" and potatoes were a factor in this decrease but were offset to some extent by higher prices for lettuce and tomatoes. The seasonally adjusted CPI advanced from August to SeptemberAfter seasonal adjustment, the CPI rose 0.2% from August to September 2004. Upward pressure came from the seasonally adjusted indexes for shelter (+0.2%), food (+0.3%), household operations and furnishings (+0.3%), recreation, education and reading (+0.2%), clothing and footwear (+0.4%), health and personal care (+0.3%), as well as, alcoholic beverages and tobacco products (+0.3%). Transportation (-0.7%) was the only seasonally adjusted index that exerted downward pressure on this increase. All-items index excluding the eight most volatile componentsThe All-items index excluding the eight volatile components identified by the Bank of Canada increased by 1.5% from September 2003 to September 2004. The main contributors to this increase were homeowners' replacement cost (+6.8%), restaurant meal prices (+2.6%), beef prices (+18.9%) and electricity prices (+4.4%). From August to September 2004, the All-items index excluding the eight volatile components identified by the Bank of Canada increased by 0.3%, mostly under the influence of price increases for women's clothing (+6.2%) and tuition fees (+4.2%). Lower automotive vehicle prices (-0.7%) partially offset the upward pressure on the index. EnergyThe energy index rose 5.8% from September 2003 to September 2004, due mostly to the rise in gasoline prices (+7.2%) and fuel oil prices (+21.7%). Higher prices for electricity (+4.4%), as well as for fuel, parts and supplies for recreational vehicles (+5.1%) also contributed to pushing the index up. These increases were offset to some degree by a decrease in natural gas prices (-2.3%). On a monthly basis, the energy index dropped by 0.5%. Although fuel oil prices increased (+5.6%), lower prices for gasoline (-1.2%), for natural gas (-0.9%), as well as for fuel, parts and supplies for recreational vehicles (-0.7%) pushed the index down. Electricity prices remained stable in September. Available on CANSIM: tables 326-0001, 326-0002, 326-0009, 326-0012 and 326-0016 to 326-0018. Definitions, data sources and methods: survey number 2301. More information about the concepts and use of the CPI are also available online in Your Guide to the Consumer Price Index (62-557-XIB, free). Available at 7 a.m. online under Today's news releases from The Daily, then Latest Consumer Price Index. The September 2004 issue of the Consumer Price Index, Vol. 83, no. 9 (62-001-XIB, $9/$83; 62-001-XPB, $12/$111) is now available. The October 2004 Consumer Price Index will be released on November 23. For more information, or to enquire about the concepts, methods or data quality of this release, call Rebecca McDougall (1-866-230-2248; 613-951-9606; fax: 613-951-1539; infounit@statcan.gc.ca), Prices Division.
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