Analysis
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The Consumer Price Index (CPI) rose 1.0% in the 12 months to June, after increasing 0.9% in May.
Lower energy prices continued to moderate the year-over-year rise in the CPI, however the effect was less pronounced than in April and May. Excluding energy, the CPI was up 2.1% in the 12 months to June, after increasing 2.2% in May.
The energy index decreased 9.0% in the 12 months to June, following an 11.8% decline in May.
The fall in the energy index was led by gasoline prices, which were down 14.1% in June compared with the same month a year earlier. This decrease followed a 17.4% year-over-year decline in May. On a month-over-month basis, gasoline prices were up 6.0% in June, after rising 5.5% in May. Gasoline prices have increased in four of the past five months, month over month, after a string of declines between July 2014 and January 2015.
The natural gas index was down 10.9% in the 12 months to June, after decreasing 14.4% the previous month. Additionally, fuel oil prices decreased 17.8% year over year in June, following an 18.6% decline the previous month.
The electricity index was the only energy component to post an increase in the 12 months to June, rising 3.2%, following a 1.0% increase the previous month.
12-month change in the major components
Prices were up in seven of the eight major components on a year-over-year basis in June, with the rise in the CPI being led by higher prices for food. An increase in the shelter index also contributed to higher consumer prices. The transportation index, which includes gasoline, recorded its eighth consecutive year-over-year decline.
Consumers paid 3.4% more for food in June compared with the same month a year earlier. Prices for food purchased from stores were up 3.6% in the 12 months to June. Higher meat prices contributed most to the increase, despite posting a smaller year-over-year rise in June (+6.6%) than in May (+7.9%). In the 12 months to June, prices were also up for dairy products (+2.5%), fresh fruit (+3.3%) and bakery products (+2.6%). Prices for food purchased from restaurants rose 2.7% in June on a year-over–year basis.
The shelter index was up 1.0% on a year-over-year basis in June, after increasing 0.5% in May. This acceleration was led by a rise in electricity prices, which rose more on a year-over-year basis in June than in May. Also contributing to the acceleration was the natural gas index, which posted a smaller year-over-year decline in June than in May. Homeowners’ home and mortgage insurance costs were up more in June (+9.2%) than in May (+8.3%).
The transportation index declined 2.6% in the 12 months to June, as gasoline prices remained lower than last year. In contrast, prices for the purchase of passenger vehicles increased 2.0% year over year in June, after posting a 1.8% rise the previous month.
12-month change in the provinces
Consumer prices rose in nine provinces in the 12 months to June, with Saskatchewan posting the largest increase. Prince Edward Island’s CPI registered its seventh consecutive year-over-year decrease. Every province recorded a smaller year-over-year decline in the energy index in June, compared with May.
Saskatchewan’s CPI was up 1.9% in the 12 months to June, after increasing 1.5% the previous month. The purchase of passenger vehicles index in Saskatchewan registered a 4.9% rise on a year-over-year basis in June. In addition, natural gas prices remained higher than a year ago.
Consumer prices in Alberta increased 1.7% in the 12 months to June, after rising 0.6% in May. This acceleration was partly attributable to electricity costs, which were down less on a year-over-year basis in June (-8.6%) than in May (-28.8%). At the same time, natural gas prices were up 6.7% in the 12 months to June, after decreasing 12.2% in May.
In Quebec, the CPI rose 1.0% year over year in June, after increasing 1.2% the previous month. This deceleration was partly attributable to fresh vegetable prices, which declined 3.6% in the 12 months to June, after rising 5.1% the previous month. In the 12 months to June, the travel services index increased 2.1%, after increasing 5.3% in May.
Prince Edward Island’s CPI decreased 0.1% on a year-over-year basis in June, after declining 0.7% the previous month. Fuel oil prices fell 21.6% in the 12 months to June in the province, a larger decrease than at the national level. The basket weight of fuel oil is 10 times greater in Prince Edward Island than in Canada as a whole.
Seasonally adjusted monthly Consumer Price Index increases
On a seasonally adjusted monthly basis, the CPI rose 0.4% in June, matching the increase in May.
Seven of eight major components were up on a seasonally adjusted monthly basis in June. The seasonally adjusted health and personal care index posted no change.
The largest increase in June was recorded in the seasonally adjusted transportation index, which rose 1.3%. Gasoline, which is a component of the transportation index, was up 6.0% on a non-seasonally adjusted basis in June.
The seasonally adjusted index for recreation, education and reading was up 0.4% in June, while the seasonally adjusted index for shelter increased 0.2%.
Non-seasonally adjusted monthly Consumer Price Index increases
On a monthly basis and before seasonal adjustment, the CPI rose 0.2% in June, after increasing 0.6% in May.
Consumer prices were up in eight of the ten provinces on a monthly basis in June. Alberta posted a 0.7% increase, the largest among the provinces. Quebec (-0.1%) was the only province to record a decrease, while Nova Scotia’s CPI posted no change.
Bank of Canada’s core index
The Bank of Canada’s core index was up 2.3% in the 12 months to June. This increase followed a 2.2% rise in May.
On a monthly basis and before seasonal adjustment, the core index posted no change in June, following a 0.4% increase in May.
The seasonally adjusted core index rose 0.3% on a monthly basis in June, following a 0.2% increase in May.
Note to readers
The special aggregate "energy" comprises electricity, natural gas, fuel oil and other fuels, gasoline, and fuel, parts and accessories for recreational vehicles.
A seasonally adjusted series is one from which seasonal movements have been eliminated. Users employing Consumer Price Index (CPI) data for indexation purposes are advised to use the unadjusted indexes. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
The Bank of Canada's core index excludes eight of the CPI'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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