Consumer price index rise by 2.2% in June

19 Jul '07

3 min read

Consumer prices rose by 2.2% in June compared with June 2006, identical to the increases in both April and May.

For the third straight month, most of the growth in average price levels was attributable to costs associated with owned accommodation (+4.9%). Also a factor, but to a lesser extent, was a 2.8% increase in costs associated with operating a vehicle.

A drop in prices for computer equipment and supplies exerted downward pressure on average prices. Excluding energy, the all-items index rose by 2.2% between June 2006 and June 2007, marginally faster than the 2.1% gain in May.

The Bank of Canada's core index rose 2.5%, faster than the 2.2% increase observed in May. The rise in homeowners' replacement cost accounted for most of this increase. This index is used by the Bank of Canada to monitor the inflation control target. Increases in this index have exceeded 2.0% for the past year.

On a monthly basis, the all-items index declined 0.2% between May and June 2007 after rising 0.4% between April and May. This is the first monthly decline in the all-items index since October 2006. The downturn was largely due to declining gasoline prices and prices for women's and men's clothing.

Both the all-items index without energy and the core index remained unchanged between May andJune 2007, following increases of 0.3% between April and May.

For a third straight month, costs associated with owned accommodation accounted for most of the increase in average price levels over 12 months. Within this category, the component that contributed the most to the increase was mortgage interest cost, which rose 5.7%, the same growth rate as in May and April. It was the fastest rate of growth since January 2001.

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