Analysis
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The Consumer Price Index (CPI) rose 1.2% in the 12 months to December, following a 0.9% increase in November.
The faster year-over-year increase in the CPI was largely attributable to higher gasoline prices, which advanced 4.7% in the 12 months to December, following a 0.4% gain in November. Gasoline prices rose on a monthly basis this December while they declined in the same month a year ago.
Excluding gasoline, consumer prices rose 1.1% on a year-over-year basis in December, after posting a 1.0% increase in November.
12-month change in the major components
Six of the eight major components recorded gains in the 12 months to December. The increase in the CPI was led by a rise in the transportation index, followed by higher shelter costs and food prices. The recreation, education and reading index posted no change on a year-over-year basis, while the health and personal care component declined.
Transportation prices advanced 2.1% on a year-over-year basis in December, after rising 0.5% the previous month. In addition to gasoline, prices for the purchase of passenger vehicles rose more (+1.4%) in the 12 months to December than in the 12 months to November (+0.4%).
Shelter costs rose 1.9% in the 12 months to December, following a 1.8% gain in November. Consumers paid 4.1% more for electricity and 1.6% more in rent. Conversely, mortgage interest cost decreased 1.3% on a year-over-year basis in December, after falling 2.1% the previous month.
Food prices rose 1.0% in December compared with the same month a year earlier. Prices for food purchased from stores increased 0.8% in the 12 months to December, following a 1.1% gain the previous month. Prices for fresh vegetables, meat and bakery products all posted smaller year-over-year increases in December compared with November.
Prices for food purchased from restaurants increased 1.4% on a year-over-year basis in December, following a 1.2% gain in November.
The health and personal care component decreased 0.4% in the 12 months to December, as the indexes for prescribed medicines, and personal care supplies and equipment declined.
12-month change in the provinces
Consumer prices rose in nine provinces in the 12 months to December. British Columbia was the exception, recording no change on a year-over-year basis. The largest increase was recorded in Prince Edward Island, while the smallest was observed in Quebec. Manitoba was the only province where consumer prices rose at a slower year-over-year rate in December than in November.
In Prince Edward Island, consumer prices increased 3.0% in the 12 months to December, following a 2.6% rise in November. Of all the provinces, Prince Edward Island recorded the largest year-over-year increase in gasoline prices (+8.5%) and in homeowner’s replacement cost (+9.5%).
Quebec recorded a 0.8% increase in consumer prices on a year-over-year basis in December, after posting a 0.6% rise in November. Quebec was the only province where prices for food purchased from stores (-0.6%) declined in the 12 months to December. Additionally, Quebec recorded the smallest year-over-year price increase for the purchase of passenger vehicles (+0.3%) of all the provinces.
Consumer prices in Manitoba rose 2.1% in the 12 months to December, a smaller increase than in November (+2.4%). Of all the provinces, Manitoba posted the smallest year-over-year increase in gasoline prices (+0.2%).
Seasonally adjusted monthly CPI increases
On a seasonally adjusted monthly basis, the CPI rose 0.2% in December, matching the increase in November.
On a seasonally adjusted basis, six of the eight major components posted increases in December. The transportation index recorded the largest increase (+1.0%).
The seasonally adjusted index for clothing and footwear rose 0.4% in December. However, before seasonal adjustment the index declined 2.9%. This indicates that the observed decline in the clothing and footwear index was largely seasonal.
The food index (-0.1%) was the only component to decline on a seasonally adjusted basis.
Non-seasonally adjusted monthly CPI declines
On a monthly basis and before seasonal adjustment, the CPI declined 0.2% in December, after recording no change in November.
In addition to paying less for clothing and footwear, consumers paid 4.1% less for traveller accommodation in December compared with November. Prices for the purchase of passenger vehicles (-0.2%) also declined on a monthly basis.
Gasoline prices rose 1.8% in December, following a 1.1% decline in November. Eight provinces posted increases in gasoline prices, with Nova Scotia (+3.5%) recording the largest increase. Gasoline prices declined in Manitoba (-3.0%) and British Columbia (-0.9%) in December.
Consumer prices fell in eight provinces in December, with Manitoba (-1.0%) recording the largest decrease. Nova Scotia and New Brunswick were the only two provinces to post no change in consumer prices on a monthly basis.
Bank of Canada’s core index
The Bank of Canada’s core index rose 1.3% in the 12 months to December, after increasing 1.1% in November.
On a month-to-month basis and before seasonal adjustment, the core index declined 0.4% in December, following a 0.1% decrease the previous month.
On a monthly basis, the seasonally adjusted core index rose 0.2% after posting no change in November.
Annual Review of the 2013 Consumer Price Index
This section examines the annual average movement in the CPI in 2013 as a whole. Annual average indexes are obtained by calculating the average of the 12 monthly index values over the calendar year. Annual average percent change should not be confused with the 12-month percent change in the CPI that is published every month. Unlike annual average change, 12-month change compares the monthly index level with the level from the same month a year earlier.
Annual change: Smaller rise in the CPI in 2013
In 2013, the annual average increase in consumer prices was 0.9%. This increase followed gains of 1.5% in 2012 and 2.9% in 2011.
The deceleration in the CPI was led by smaller price increases for food and for transportation.
Food prices rose 1.2% in 2013, the smallest annual average gain since 1999. The 2013 advance followed an increase of 2.4% in 2012. This deceleration in the food index was led by meat prices, which increased 2.1% in 2013 after rising 5.3% in 2012. In contrast, prices for fresh vegetables and fresh fruit posted larger gains in 2013 compared with the previous year.
Prices for food purchased from restaurants increased 1.5% in 2013, the lowest annual average gain for this index since 1994.
Transportation costs rose 0.7% in 2013, following a 2.0% gain in 2012. Gasoline prices rose 0.6% in 2013 after rising 2.5% in 2012. Prices for the purchase of passenger vehicles also recorded a smaller increase (+0.9%) in 2013 compared with 2012 (+1.4%).
Annual change: Shelter costs are the major contributor to the rise in the CPI
The increase in the CPI in 2013 was largely attributable to higher shelter costs. Health and personal care was the only component to post a decline.
The annual average increase in the CPI was led by shelter costs, which rose 1.3% in 2013. Consumers paid more in property taxes (+2.8%), rent (+1.6%) and homeowners’ replacement cost (+1.9%) in 2013. In contrast, mortgage interest cost declined 3.4%, marking the fourth consecutive annual average decrease in this index.
Annual change: Prices increase in nine provinces in 2013
Consumer prices rose in nine provinces in 2013, the exception being British Columbia where prices declined 0.1%. The largest annual average gain in consumer prices was recorded in Manitoba (+2.2%) and the smallest in Quebec (+0.7%).
Annual change: The Bank of Canada’s core index
On an annual average basis, the Bank of Canada’s core index increased 1.3% in 2013 following a 1.7% rise in 2012.
Note to readers
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.
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.
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