Analysis

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The Consumer Price Index (CPI) rose 0.5% in the 12 months to January, following a 0.8% increase 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 increasing 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 only 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 increases 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, and 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 increase 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 increased 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 in 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 increase 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 in 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 increase 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 rising 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 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% and the food index fell 0.1% in January. Conversely, the indexes for shelter, household operations, furnishings and equipment, and alcoholic beverages and tobacco products increased.

Non-seasonally adjusted monthly CPI increases

On a monthly basis and before seasonal adjustment, the CPI rose 0.1% in January, after falling 0.6% in December. The January rise was led by a 1.6% monthly price increase for the purchase of passenger vehicles.

Shelter costs rose 0.2% in January after posting no change in December. Price increases were registered for natural gas (+4.0%), water (+4.7%), and electricity (+0.6%).

Food prices rose 0.3% in January, following a 0.2% decline in December. Consumers paid more for fresh vegetables and food purchased from restaurants, but less for fresh fruit.

Prices for recreation, education and reading decreased 1.5% in January led by price declines for travel tours.

Prices for clothing and footwear fell 1.5% in January following a decrease of 3.6% in December. Prices decreased for women’s clothing (-2.0%) and men’s clothing (-1.7%).

On a provincial basis, consumer prices rose in seven of the ten provinces. The largest increase occurred in Nova Scotia (+0.4%). Quebec (-0.1%) was the only province to register a decline, while Ontario and Alberta recorded no change.

Bank of Canada’s core index

The Bank of Canada’s core index rose 1.0% in the 12 months to January, following an increase of 1.1% in December.

On a month-to-month basis and before seasonal adjustment, the core index increased 0.1% in January after decreasing 0.6% in December.

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