Canadian consumer index registers slight rise

Consumer prices rose 0.1% in the 12 months to May 2009, down from the 0.4% increase in April. Slowdown attributed to a18.3% year-over-year price drop for energy products.

High prices last year had a larger impact on the decline in the energy price index rather than any recent market developments. Energy prices, on a month-to-month basis, rose 4.4% from April to May. Statistics Canada reports of the eight major components, upward pressure on the CPI continued to come primarily from increasing prices for food. Food prices have remained strong,however, the increase has been slowing since March 2009. Excluding food, the CPI fell 1.2% in the 12 months to May. Gasoline and passenger vehicles continued to fall, thus driving transportation costs 8.2% lower, making this the most significant downward contributor to the CPI in the 12 months to May. 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. Food costs rose 6.4% in the 12-months to May, following a 7.1% increase in April. This was the slowest rate of growth since the 6.1% rise in October 2008.