Canada: Gas Prices Drive Consumer Index Up

Higher prices for gasoline are responsible for the rise in consumer prices by 3.5% from August 2007 to August 2008. On a monthly basis, consumer prices after seasonal adjustment rose 0.2% from July to August 2008. The 12-month increase in the Consumer Price Index (CPI) in August was the largest since the 12-month rate of growth of 4.2% in March 2003. In August, gasoline prices rose 26.3% compared with the same month one year earlier. Prices for other energy components, such as natural gas and fuel oil and other fuels, also contributed significantly to the rise in consumer prices. Overall, energy prices rose 20.2% over the 12 months to August 2008. This increase in the energy price index is responsible for approximately 50 per cent of the overall increase in the 12-month variation of the CPI in August. Excluding energy, the CPI rose 1.8% over the 12 months to August, up from the 1.6% 12-month rate of growth posted for July. As well, driven by price increases for grain and bakery products, prices for food purchased from stores also contributed significantly to the change in the 12-month CPI in August.