Tuesday, January 25, 2005

Inflation rate eases

THE RATE of inflation, as measured by the Consumer Price Index, eased slightly in December as drivers got a break with gasoline prices.

Consumers paid 2.1% more than in December 2003 for the goods and services included in the CPI basket, compared with a year-over-year gain of 2.4% in November.

Gasoline continued to exert upward pressure as prices were 12.1% higher in December than they were a year earlier. However, this was somewhat lower than the year-over-year growth of 17.7% in November. Residents of Manitoba experienced the largest increase, a 25.5% hike.

Upward pressure was also exerted by higher homeowners' replacement costs, restaurant meal prices and the purchase and leasing of automotive vehicles.

However, these increases were moderated by lower prices for computer equipment and supplies, natural gas, automotive vehicle insurance premiums and women's and men's clothing.

Prices for computer equipment and supplies have tumbled 18.8% since December 2003.

Eight components

The “core rate”, the all-items index excluding the eight volatile components identified by the Bank of Canada, rose 1.7% compared with 1.6% in November.

On a monthly basis, prices fell 0.2% between November and December, following a 0.4% increase in November. This reversal was largely attributable to a much smaller increase in purchase and leasing prices for automotive vehicles than in November.

Lower prices for gasoline, women's and men's clothing, fuel oil and traveller accommodation also accounted for this reduction. Higher prices for the purchase and leasing of automotive vehicles, fresh vegetables and air transportation moderated the decline.

For more information, contact Rebecca McDougall (1-866-230-2248), Prices Division.

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© 2004, 2005 Statistics Canada.