Consumer costs in Canada eased to 3.1 per cent in June, after an eight-year high of 3.7 per cent in May, according to Statistics Canada.
The rate is expected to continue to drop in coming months as the July 2010 introduction of higher sales tax in Ontario and British Columbia will no longer be included in the calculations, eliminating 0.6 points off the rate.
Lower prices for passenger vehicles were the main reason for June’s reading, as it fell 3.1 per cent in the 12 months prior, following a 0.7 per cent increase in May. Traveler accommodations also decreased to 2.9 per cent after increasing 3.3 per cent in May.
Energy prices advanced 15.7 per cent during the 12 months to June, following last month’s 16.6 per cent increase. On a year-over-year basis, gasoline prices increased 28.5 per cent, which is slightly less than the 29.5 per cent gain in May
Prices for food purchased from stores rose 4.8 per cent in the 12 months to June continuing last month’s growth of 4.2 per cent in May.
Among major components, shelter costs rose 1.7 per cent. Clothing and footwear prices showed continued growth with an increase of 0.8 per cent in the 12 months to May. This makes it the third year-over-year increase since November 2009.
The bank’s core index — or inflation minus the most volatile elements, including energy, some fruits and vegetables, mortgage interest, and tobacco — fell to 1.3 per cent in the 12 months to June, following a 1.8 per cent gain in May.
The largest increase in consumer prices was observed in Nova Scotia for the sixth month in a row. The province saw a 4.4 per cent increase, down slightly from last month’s 4.6 per cent increase.
The smallest increase was experienced in Alberta for a second month with prices averaging only 2.1 per cent higher than a year ago. Last month, the province saw a 2.8 per cent gain.
In the United States, June’s rate of inflation remained unchanged at 3.6 per cent. Last month, the U.S. experienced the biggest 12-month jump since October 2008, according to the U.S. Labor Department. Shelter, apparel, new vehicles, used cars and trucks, and medical care were the principal source of the ongoing growth.
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