CPI on the Rebound August 2011 in Canada


Here we go again folks, the Consumer Price Index as reported by Stats Canada for August 2011 shows that Inflation is bouncing back up and the CPI (year over year) is back above %3 with it sitting at 3.1% (for the past 12 months). Surprisingly the regular culprit was not the catalyst for this past month’s 0.4% (month over month) jump (i.e. it wasn’t Energy/Gas directly).

The 0.4 percentage point difference between the year-over-year increases posted in August and July was mainly the result of price increases for the purchase of passenger vehicles, electricity, homeowners’ home and mortgage insurance, telephone services and jewellery.

Jewellery? Really? Wow, that has a high impact on spending?

CPI in Canada for Past Little While

If you do read closer, you do see that Energy prices (year over year) are actually up 13.4% which is actually a huge jump, so they really are the biggest upward pressure on the CPI (not sure why Jewellery is so darn important).

Gas Price Index for Past Little While in Canada

The wild swings for Gasoline prices seem to be the major culprit these days, but the trickle down effect of these prices cause things like Food prices to jump as well.

Bank of Canada’s core index


The Bank of Canada’s core index rose 1.9% in the 12 months to August, following a 1.6% gain in July. The higher increase in August was primarily a result of a rise in prices for passenger vehicle insurance premiums, food purchased from restaurants as well as bakery and cereal products.

Really? Wow, to see that big a difference between what the Bank of Canada and the published numbers are (38% difference), always makes me scratch my head. I guess the good news is that this Inflation rate is within the Bank’s parameters, so less reasons to raise interest rates?

The Big Table

Want to look a little closer at where the price jumps really were, have a look at this table it will help you see where your buying power is dropping the quickest.

Consumer Price Index and major components, Canada - Not seasonally adjusted

Relative importance¹ August 2010 July 2011 August 2011 July to August 2011 August 2010 to August 2011
% (2002=100) % change
All-items CPI 100.00² 116.7 120.0 120.3 0.3 3.1
Food 15.99 123.5 129.0 128.9 -0.1 4.4
Shelter 27.49 124.0 125.9 126.2 0.2 1.8
Household operations, furnishings and equipment 11.55 109.0 110.7 111.2 0.5 2.0
Clothing and footwear 5.31 90.1 89.7 90.6 1.0 0.6
Transportation 20.60 117.1 125.0 125.3 0.2 7.0
Health and personal care 4.95 116.4 116.7 117.5 0.7 0.9
Recreation, education and reading 11.20 105.0 106.8 106.4 -0.4 1.3
Alcoholic beverages and tobacco products 2.91 134.4 136.1 136.1 0.0 1.3
Special aggregates
Core CPI³ 82.15 115.6 117.3 117.8 0.4 1.9
All-items CPI excluding energy 89.92 114.9 117.0 117.2 0.2 2.0
Energy 10.08 139.2 157.9 157.9 0.0 13.4
Gasoline 5.80 147.4 182.5 181.0 -0.8 22.8
All-items CPI excluding food and energy 73.93 113.0 114.3 114.7 0.3 1.5
Goods 47.80 109.1 112.9 113.2 0.3 3.8
Services 52.20 124.3 127.1 127.3 0.2 2.4
1. 2009 CPI basket weights at April 2011 prices, Canada, effective May 2011. Detailed weights are available under the Documentation section of survey 2301 (www.statcan.gc.ca/imdb-bmdi/index-eng.htm).
2. Figures may not add up to 100% as a result of rounding.
3. The Bank of Canada’s core index excludes eight of the Consumer Price Index‘s most volatile components (fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuels; gasoline; inter-city transportation; and tobacco products and smokers’ supplies) as well as the effects of changes in indirect taxes on the remaining components. For additional information on the core CPI, please consult the Bank of Canada website (www.bankofcanada.ca/rates/price-indexes/cpi).

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