RTTNews - Consumer prices in Canada rose unexpected on a yearly basis in May, but the pace of the increase slowed from the previous month, according to data released Thursday by Statistics Canada.
Consumer prices inched higher by 0.1% in the 12 months to May 2009, down from the 0.4% increase in April. Economists were looking for consumer prices to slip 0.2%.
Core prices excluding energy and food advanced 2.0% over the 12 months to May, up from the 1.8% rise posted in April.
The seasonally adjusted monthly core index increased 0.3% from April to May, after increasing 0.2% from March to April.
On a monthly basis, prices were up 0.4% in May after easing 0.1% in April.
The slowdown in the 12-month Consumer Price Index (CPI) was primarily the result of an 18.3% year-over-year price drop for energy products. Excluding energy, the CPI rose 2.3%.
Statistics Canada noted the decline in the energy price index was due more to high prices in 2008 than to recent market developments. On a month-to-month basis, energy prices rose 4.4% from April to May.
Of the eight major components, upward pressure on the CPI continued to come primarily from increasing prices for food.
While food prices remained strong, the increase has been slowing since March 2009. Excluding food, the CPI fell 1.2% in the 12 months to May.
Continued price drops for gasoline and passenger vehicles drove transportation costs 8.2% lower, making this the most significant downward contributor to the CPI in the 12 months to May.
Gasoline prices fell 25.1% from May 2008 to May 2009 following a 12-month decline of 24.7% in April. An increase in passenger vehicle insurance premiums tempered the overall decline in costs for transportation.
A 0.2% 12-month drop in the shelter cost index also put downward pressure on the CPI in May. It was the first drop since July 2002. Price pressures for shelter have eased significantly in 2009, following price increases averaging 4.4% in 2008.
On a seasonally adjusted monthly basis, the CPI rose
0.2% from April to May, after falling 0.2% from March to
April. May's increase was due primarily to a 2.7% rise in
the transportation price index. A monthly increase in
prices for gasoline in May compared with April largely
accounted for the rise in the transportation index.
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