Still High and Gettin’ Higher
No this is not from some rock concert I enjoyed over the weekend, Stats Canada published the Consumer Price Index numbers on Friday and Inflation continues to stay high (and is even rising a little more).
Consumer prices rose 3.3% in the 12 months to April, matching the increase recorded in March. On a seasonally adjusted monthly basis, consumer prices rose 0.3% in April.
As can be seen if you drive a car, the major contributing factor continues to be energy in general and gasoline in specific.
In fact without energy CPI dropped a little last moth, but still it is mighty high. Oh and if you were thinking Gas prices really did look a lot higher, you were correct:
Energy prices advanced 17.1% during the 12 months to April, following a 12.8% increase in March. Gasoline prices increased 26.4%, bringing prices at the pump to a level 5.0% below the record high of July 2008. This increase followed an 18.9% gain in the 12 months to March.
All I can say to that one is yikes! Given the price has even got to almost $1.40 a liter in Ottawa lately, this suggests it could be a summer of discontent in terms of gasoline prices.
Could this help ressurect the sales of electric cars and hybrids? If this doesn’t nothing else will, and we are truly addicted to gasoline.
What does the Bank of Canada think of this? Well their average says:
The Bank of Canada’s core index advanced 1.6% in the 12 months to April, following a 1.7% rise in March.
The seasonally adjusted monthly core index increased 0.2% in April, after rising 0.5% in March.
I hear you saying, WTF? Yes, it seems the way the Bank of Canada computes the CPI makes it seem much lower, but 1.6% is still getting into the we should do something area for the Bank as well.
The Big Table
Let’s look a little closer at the big picture and we can see just how bad this all is. Clothing is actually cheaper for now, but holy cats Energy, Gasoline and Transport are kicking us hard.
Consumer Price Index and major components, Canada
| Relative importance1 | April 2010 | March 2011 | April 2011 | March to April 2011 |
April 2010 to April 2011 |
|
|---|---|---|---|---|---|---|
| Not seasonally adjusted | ||||||
| % | (2002=100) | % change | ||||
| All-items | 100.002 | 116.0 | 119.4 | 119.8 | 0.3 | 3.3 |
| Food | 17.04 | 122.8 | 127.2 | 126.9 | -0.2 | 3.3 |
| Shelter | 26.62 | 122.4 | 124.6 | 125.2 | 0.5 | 2.3 |
| Household operations, furnishings and equipment | 11.10 | 108.5 | 110.4 | 109.8 | -0.5 | 1.2 |
| Clothing and footwear | 5.36 | 94.1 | 94.4 | 93.1 | -1.4 | -1.1 |
| Transportation | 19.88 | 117.4 | 124.8 | 127.2 | 1.9 | 8.3 |
| Health and personal care | 4.73 | 114.8 | 116.4 | 117.3 | 0.8 | 2.2 |
| Recreation, education and reading | 12.20 | 102.9 | 104.9 | 105.1 | 0.2 | 2.1 |
| Alcoholic beverages and tobacco products | 3.07 | 131.8 | 134.8 | 135.0 | 0.1 | 2.4 |
| Special aggregates | ||||||
| Core CPI3 | 82.71 | 115.3 | 117.0 | 117.2 | 0.2 | 1.6 |
| All-items excluding energy | 90.62 | 114.4 | 116.8 | 116.7 | -0.1 | 2.0 |
| Energy | 9.38 | 136.0 | 151.7 | 159.2 | 4.9 | 17.1 |
| Gasoline | 4.92 | 147.8 | 175.5 | 186.8 | 6.4 | 26.4 |
| All-items excluding food and energy | 73.57 | 112.5 | 114.4 | 114.4 | 0.0 | 1.7 |
| Goods | 48.78 | 109.4 | 113.0 | 113.7 | 0.6 | 3.9 |
| Services | 51.22 | 122.6 | 125.7 | 125.9 | 0.2 | 2.7 |
What was inflation like a year ago? Here is a link to April 2010 Inflation Numbers.
I think it’s important to note that Inflation is actually the decrease in the purchasing power of our money. Price increases – price “inflation” is just how that is expressed in the economy. I know most people use the terms interchangeably, but there is a difference.
I heard that food prices were going to increase by 8-10% this year. I haven’t seen that yet but things are getting more expensive. Last year I got a cost of living raise and work and I am really hoping I get another one this year. Every little bit helps right.
In Australian we’re currently paying the $5.65 (canadian dollars) a gallon. In England it’s approaching $8 a gallon.
The reality is that it’s still remarkably cheap in canada. SOOOOOO cheap. If only I could buy it over the internet i would be downloading that stuff for sure!
In the U.S., the government says inflation is pretty low. If you look at food and gas, it is easy to disagree. These items are considered commodities that are excluded from CPI. Yet, these items are what most of us have to pay for everyday.