MNI 5 THINGS: Canada June CPI +2.5%, Above Expectations>

By Courtney Tower 

     OTTAWA (MNI) - The following are the key points from the June data 

on Canadian inflation published Friday by Statistics Canada: 

     - Inflation rose in June to 2.5% on an annual basis from 2.2% in 

May, by more than the 2.3% analysts had expected. Inflation followed a 

year of gradual increases, reflecting price rises for gasoline and food 

purchased from restaurants. There were offsetting factors such as lower 

price inflation for electricity and telephone services. The price of 

goods (+2.7%) led the increase, while services gained 2.2% on the year. 

CPI increased 2.3% the second quarter of this year, the highest level 

since the same 2.3% in the first quarter of 2012. On a monthly basis, 

CPI rose 0.1% in June. Analysts surveyed by MNI had a flat performance. 

Both goods and services increased by 0.1% in June from May, not 

seasonally adjusted. 

     - The Bank of Canada's three preferred measures of core inflation 

stayed very near the 2.0% target, with CPI-common remaining unchanged 

from May at 1.9% and CPI-median also unchanged at 2.0%. CPI-Trim rose to 

2.0% from 1.9%. 

     - Seven of the eight major components increased, with the 

transportation index (+6.6%) being the largest contributor. Within 

transportation, gasoline prices rose 24.6% on the year, the largest 

increase since June 2011. The household operations, furnishings and 

equipment index (-0.1%) was the only major component to decline. 

     - Energy costs were 12.4% higher year-over-year, gaining from 

+11.6% in May. Apart from gasoline, fuel oil and other fuels (+25.9%) 

also rose, on "sustained increases in crude oil prices sand exchange 

rate pressures," the agency said. Prices for durable goods rose 0.6% 

year-over-year, on growth in purchases of passenger vehicles (+1.8%).                               

For services, year-over-year gains of 2.2% in June were lower than May's 

2.3%. 

     - The seasonally adjusted monthly CPI increase of 0.1% matched the 

increase in May. Six of the eight major components increased, while 

there were declines for household operations, furnishings and equipment 

(-0.3%) and recreation, education and reading (-0.6%). The index was up 

0.2% excluding food and energy. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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