Canada's Housing Bubble

Jan 25, 2011 Courtney Tower imarketnews.com

Ottawa - Annual inflation in Canada rose again in December to 2.4%, where it had been in October, from a 2.0% annual inflation rate in November, Statistics Canada reported Tuesday.

Consumer prices overall in December neither rose nor fell from the previous month, at a recorded 0.0%, but the Consumer Price Index on a year-over year basis rose to 2.4%. Statistics Canada said the 0.4% gain was mainly due to a 13.0% rise in gasoline prices between December of 2009 and December, 20120.

Excluding gasoline, the CPI rose 1.8% in December, precisely the same increase recorded in November.

Consumers also paid 6.2% more for electricity and 9.2% more for natural gas in December, year-on-year. Overall,there was a 12-month rise of 10.5% in energy prices.

On the 12-month basis, prices were up in seven of the eight major CPI components, with the largest increase being in transportation, up 4.9% The only sector to show a decrease was clothing and footwear, down 2.0% in December following a 3.2% decrease in November, year-over-year.

The core index of the Bank of Canada, removing volatile items in the CPI basket, was 1.5% in December, following a 1.4% rise in November.

Seasonally adjusted, all-items consumer prices rose 0.3% in December after increasing 0.2% in October. The seasonally adjusted monthly core index rose 1.5% in the 12 months to December, after being unchanged the previous month.

Not seasonally adjusted, in addition to December's higher gasoline prices consumers paid 4.3% more for passenger vehicle insurance premiums and 1.5% more for the purchase of passenger cars. Shlter costs were up 2.7% and homeowners' replacement cost up 4.3%. Food prices rose 1.7% year-on-year.

Consumer prices increased in all provinces in the 12 months.