Consumer Price Index

Consumers paid less for gasoline at the pump in February, which pushed the 12-month change in the Consumer Price Index (CPI) back down to 2.2% from 2.8% the month before.

February's slowdown in the All-items index was due mainly to a 6.8% decline in the price of gasoline between January and February.

Excluding energy, the All-items index rose 1.6% between February 2005 and February 2006, the same increase as in the previous month.

At the same time, the All-items index excluding the eight volatile components identified by the Bank of Canada rose 1.7% on a 12-month basis, also unchanged from January.

On a monthly basis, consumer prices fell 0.2% between January and February this year, after a 0.5% increase between December and January. The decline was due mainly to lower prices for some energy items, especially gasoline, as the All-items index excluding energy rose 0.2%.

The All-items index excluding the eight volatile components identified by the Bank of Canada increased 0.3% between January and February, the result mainly of increases in travel tour prices.

Gasoline still influences the 12-month change in the CPI but to a lesser extent

In February, although consumers paid 2.2% more than in February 2005 for the goods and services included in the Consumer Price Index basket, this was down compared to the 2.8% rise recorded in January. The main factors behind the increase in February were gasoline, the purchase and leasing of automotive vehicles, homeowners' replacement cost, and natural gas.

Exerting a moderating effect were lower prices for insurance premiums for automotive vehicles, computer equipment and supplies, and women's clothing.

Average gasoline prices were 7.4% higher in February compared to the same month a year ago, the smallest 12-month increase since June 2005 (+4.2%). Increases were posted in all provinces and ranged from 2.6% in Manitoba to 18.8% in Prince Edward Island.

The price of purchasing and leasing an automotive vehicle rose an average of 3.2% in February. All provinces posted increases, with the most modest advance in Alberta (+2.6%) and the strongest in Manitoba (+5.3%).

Homeowners' replacement cost, which represents the worn out structural portion of housing, and is estimated using new housing prices (excluding land), was up 5.8% between February 2005 and February 2006. The increase was mainly due to price gains in Ontario (+4.2%) and Alberta (+18.5%), although all provinces showed advances.

In February, natural gas prices were 17.1% higher compared to February 2005. All provinces posted increases, ranging from 4.6% in Alberta to 22.7% in Ontario.

Exerting a moderating effect, insurance premiums for automotive vehicles were 3.1% lower in February compared to the same month a year earlier. As a result, the automotive vehicle insurance premiums index was at 196.3 (1992=100), its lowest level since July 2003.

Continuing its downward trend, the index for computer equipment and supplies fell 17.1% compared to February 2005.

Women's clothing also moderated the increase, falling by 4.1%. With changing global manufacturing patterns, lower prices for clothing have been the usual trend over the last few years. Except for New Brunswick and Quebec, all provinces reported decreases in February, ranging from 0.4% in Saskatchewan to 11.7% in Manitoba.

For six of the eight major components of the CPI, prices in February 2006 were higher than those of February 2005. The indexes for shelter (+3.7%), transportation (+3.1%), and food (+2.8%) exerted the strongest upward pressure. The indexes for clothing and footwear (-2.5%) and for recreation, education and reading (-0.3%) exerted downward pressure.

Monthly CPI pushed down by lower gasoline prices

Between January and February, the CPI fell by 0.2%, from a level of 128.8 to 128.6 (1992=100). Lower prices for gasoline, natural gas and fresh vegetables were offset only in part by higher prices for travel tours and men's clothing.

Gasoline prices fell by 6.8% between January and February 2006, after having risen sharply in January. All provinces recorded declines, ranging from 0.1% in Newfoundland to 9.5% in Ontario. Crude oil prices fell steadily through the first half of February, then slowly crept up again towards the end of the month, with pump prices following suit.

After a 15.4% hike in January, the price of natural gas decreased by 5.5% in February, due to lower gas commodity costs. Alberta, with a decrease of 31.4%, was the main cause of the national drop. Other provinces posted more modest price changes, from a 9.9% decline in Quebec to an increase of 4.3% in Ontario.

All categories of fresh vegetables posted price decreases in February, leading to a 6.8% decline in the fresh vegetable index. Vegetable prices usually fall in February but, this year, the decline was slightly larger. This decline follows a sharp increase in prices last month resulting from adverse weather conditions. The fresh fruit index was also down, falling 3.8% compared to January.

Exerting upward pressure on the All-items CPI, prices of travel tours increased by 8.1% in February compared to January. This is the usual trend at this time of the year, as the winter holiday season swings into high gear.

Prices for men's clothing also exerting upward pressure, increasing by 3.4% between January and February as end of season sales were winding down.

The seasonally adjusted CPI down between January and February

Seasonally adjusted, the CPI dropped by 0.3% between January and February 2006.

Downward pressure came from the indexes for transportation (-1.8%), clothing and footwear (-0.8%), shelter (-0.1%), recreation, education and reading (-0.2%) and household operations and furnishings (-0.1%).

The seasonally adjusted index was pushed up by the food (+0.2%), alcoholic beverages and tobacco products (+0.4%), and health and personal care (+0.2%) indexes.

The All-items index excluding the eight volatile components

The All-items index excluding the eight volatile components identified by the Bank of Canada increased by 1.7% between February 2005 and February 2006. The main factors behind this increase were the purchase and leasing of automotive vehicles (+3.2%), homeowners' replacement cost (+5.8%), restaurant meals (+2.9%) and electricity (+4.7%). The increase was moderated by lower insurance premiums for automotive vehicles (-3.1%), as well as prices for computer equipment and supplies (-17.1%), women's clothing (-4.1%) and traveller accommodation (-6.7%).

Between January and February 2006, the All-items index excluding the eight volatile components identified by the Bank of Canada increased by 0.3%. The main factors exerting upward pressure were travel tours (+8.1%), men's clothing (+3.4%) and homeowners' replacement cost (+0.9%). Factors pushing the index downward were homeowners' maintenance and repairs (-0.9%), fresh or frozen chicken (-3.0%), and non-alcoholic beverages (-1.3%).

Energy

Following a 15.3% increase between January 2005 and January 2006, the energy index rose 8.1% between February 2005 and February 2006.

Although all components contributed to the increase in the energy index in February 2006, the gasoline index (+7.4%) was again the main factor, followed closely by natural gas (+17.1%), electricity (+4.7%), fuel oil (+13.7%), and fuel, parts and supplies for recreational vehicles (+6.4%).

The energy index fell by 4.2% on a monthly basis, largely under the influence of lower gasoline prices (-6.8%), and to a lesser extent, natural gas (-5.5%), fuel oil (-0.5%), and fuel, parts and supplies for recreational vehicles (-3.0%). Electricity prices were unchanged from last month.

Available on CANSIM: tables 326-0001, 326-0002, 326-0009, 326-0012 and 326-0016 to 326-0018.

Definitions, data sources and methods: survey number 2301.

More information about the concepts and use of the CPI are available online in Your Guide to the Consumer Price Index (62-557-XIB, free).

Available at 7 a.m. online under Today's news releases from The Daily, then Latest Consumer Price Index.

The February 2006 issue of the Consumer Price Index, Vol. 85, no. 2 (62-001-XIB, $9/$83; 62-001-XPB, $12/$111) is now available.

The March Consumer Price Index will be released on April 20.

For more information, or to enquire about the concepts, methods or data quality of this release, call the Client Services Unit (1-866-230-2248; 613-951-9606; fax 613-951-1539; infounit@statcan.ca), Prices Division.