August 19, 2009

Canada experiences 2nd month of deflation

Consumer prices in Canada fell 0.9 percent in July on an annual basis, the second consecutive monthly decline, Statistics Canada reported Wednesday.

The decrease was due primarily to a 12-month decline of 23.4 percent in prices for energy products, particularly gasoline, the agency said.

On the heels of a 0.3 percent overall decrease in June, prices fell in three of the eight major sectors: transportation, which includes gasoline, shelter and clothing/footwear, the report said. Transportation costs fell 1.6 percent, shelter prices decreased 2 percent and clothing and footwear prices were down 2.1 percent.

Among the sectors where prices increased in July, the leader was food, which rose 5 percent, compared with increases of 5.5 percent in June and 6.4 percent in May. Within that sector, price increases for food purchased from restaurants rose 3.4 percent, following increases of 3.6 percent in June and 4 percent in May, StatsCan said.