Canada June Inflation Rate Slows to 1%

Canada’s annual inflation rate slowed in June as gasoline prices fell for the first time since October 2009 while the costs of home upkeep and car insurance advanced.

The consumer price index rose 1 percent, the slowest in seven months, after a 1.4 percent gain in May, Statistics Canada said. The core rate that excludes eight volatile items slowed to 1.7 percent from 1.8 percent.

Overall and core inflation will advance at about a 2 percent pace through 2012 as the economy returns to full capacity after last year’s recession, Bank of Canada Governor Mark Carney said yesterday. The bank’s forecast anticipates a gradual” rise in interest rates to keep inflation at that pace, Carney said.

Retail gasoline prices fell 2.9 percent in June from a year earlier, compared with a 6.9 percent increase the previous month, Statistics Canada said. Clothing and footwear prices fell 1.8 percent. Automobile insurance premiums rose 5.3 percent, and car prices rose 2.8 percent.

Homeowner replacement costs rose 5.2 percent in June, the report said. Food prices rose 0.7 percent from a year ago, the least since March 2008. Restaurant food rose 1.8 percent and food purchased at stores rose 0.1 percent.

On a monthly basis, both overall and core consumer prices fell 0.1 percent in June. Both those measures had advanced by 0.3 percent in the previous two months. Economists predicted that monthly prices would be little changed in June, and the core rate would be 0.1 percent.

Canada June Inflation Rate Slows to 1%, Bloomberg
7/23/2010 10:11:52 AM