Inflation Jumps in March 2014

Thanks to the new Energy Crisis (or energy gouging depending on how you want to look at it), Inflation started to jump in March (year over year) by 1.5%.

Specifically Stats Canada points out in their report:

The larger year-over-year rise in the CPI in March compared with February was led by energy prices, which rose 4.6% in the 12 months to March, following a 1.6% increase in February. Gasoline prices rose 1.4% on a year-over-year basis, after decreasing 1.3% in February. In addition, the natural gas index increased 17.9% in March, following a 5.5% rise in February. The rise in the natural gas index in March was mainly attributable to a price increase in Alberta.

Enbridge is jumping Natural Gas prices, Ontario is jacking up their Electric rates and gas prices are going up like wild-fire in Ottawa, all in all, I smell a start to inflation again? We shall see if I am correct or not.

Inflation for Past Little While

Inflation for Past Little While, JUMP!

A very interesting saw tooth pattern seems to be happening over the past while, isn’t it?

Overall if this trend continues, it might actually get the Bank of Canada’s attention.

Inflation for past little while

Seasonally Adjusted Consumer Price Index Overall for the past little while

Bank of Canada’s Index

Remembering that the Bank of Canada has its own “basket of goods” that it measures inflation with, their version of inflation was not quite as high as Stats Canada’s version:

The Bank of Canada's core index rose 1.3% in the 12 months to March, after increasing 1.2% in February.

Not as high, but still troubling.

The Big Table

What is going up in price? Here is a non-seasonally adjusted table for you (look for Shelter, Energy, and Alcohol):

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

Relative import1 March 2013 Feb 2014 Mar 2014 Feb to Mar 2014 Mar 2013 to Mar 2014
% (2002=100) % change
All-items Consumer Price Index (CPI) 100.002 122.9 124.1 124.8 0.6 1.5
Food 16.60 132.4 134.3 134.4 0.1 1.5
Shelter 26.26 128.0 130.7 131.4 0.5 2.7
Household operations, furnishings and equipment 12.66 114.7 115.3 115.7 0.3 0.9
Clothing and footwear 5.82 95.3 91.0 94.0 3.3 -1.4
Transportation 19.98 129.5 130.8 131.7 0.7 1.7
Health and personal care 4.93 118.3 118.4 118.1 -0.3 -0.2
Recreation, education and reading 10.96 105.2 106.4 106.5 0.1 1.2
Alcoholic beverages and tobacco products 2.79 139.8 142.9 145.3 1.7 3.9
Special aggregates
Core CPI3 84.91 120.9 122.1 122.5 0.3 1.3
All-items CPI excluding energy 91.44 120.0 121.0 121.5 0.4 1.3
Energy4 8.56 159.9 162.6 167.2 2.8 4.6
Gasoline 4.62 186.5 183.7 189.2 3.0 1.4
All-items CPI excluding food and energy 74.85 117.2 118.2 118.6 0.3 1.2
Goods 48.18 115.4 115.6 117.0 1.2 1.4
Services 51.82 130.3 132.5 132.5 0.0 1.7

1.2011 CPI basket weights at January 2013 prices, Canada, effective February 2013. Detailed weights are available under the Documentation section of survey 2301 (www.statcan.gc.ca/imdb-bmdi/2301-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 CPI’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, consult the Bank of Canada website (www.bankofcanada.ca/rates/indicators/key-variables/inflation-control-target/).

4.The special aggregate “Energy” includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles.

 

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Inflation at 1.1%, That is Low for February

A week ago our friends at Stats Canada put out their monthly Consumer Price Index report for February 2014, and year over year Inflation was running at a low-ish 1.1%, which is not likely to trigger any kind of reaction from the Bank of Canada (at least it shouldn’t).

This month gasoline helped keep the index down, but how much longer will that work? Gas is back up to $1.30 in Ottawa, and the big “kick in the lower abdomen” will be Enbridge’s 40% Natural Gas jump and Ontario’s Hydro price jumps too.

How much has Gasoline prices jumped around in the past little while, have a look at this graph, and note the index on the left, those are some wild price swings:

Gas Price Index

Gas Price Index for the Past Little While

The weird part of that graph is the way prices changes are not increasing slowly they slash up and down at an alarming rate.

The scary thing to look at is food prices, to quote our Stats Canada amigos:

Prices for food purchased from stores increased 1.0% on a year-over-year basis, led by higher prices for fresh fruit (+7.5%) and meat (+2.1%). In contrast, prices for dairy products, sugar and confectionery as well as fruit juices declined in February. Prices for food purchased from restaurants increased 1.1%.

Given the problems with the weather in North America, Fresh Fruit prices sky rocketing is to be expected, but it isn’t appreciated.

If we started at 2002 as a start where sits the CPI now, 12 years later? This graph will help you with that:

CPI year over year for past little while

CPI Year over year for the past little while (100 was at 2002)

Not exactly hyper-inflation.

The Big Table

As usual I include one of the big tables from the report showing the parts of the basket that is the CPI:

Table 1
Consumer Price Index and major components, Canada - Not seasonally adjusted

 

Relative importance1

February 2013

January 2014

February 2014

Jan
to Feb 2014

Feb 2013
to Feb 2014

 

%

(2002=100)

% change

All-items Consumer Price Index (CPI)

100.002

122.7

123.1

124.1

0.8

1.1

Food

16.60

132.9

133.0

134.3

1.0

1.1

Shelter

26.26

127.9

130.5

130.7

0.2

2.2

Household operations, furnishings and equipment

12.66

114.3

114.7

115.3

0.5

0.9

Clothing and footwear

5.82

91.4

89.2

91.0

2.0

-0.4

Transportation

19.98

130.3

129.2

130.8

1.2

0.4

Health and personal care

4.93

118.6

118.3

118.4

0.1

-0.2

Recreation, education and reading

10.96

104.7

104.7

106.4

1.6

1.6

Alcoholic beverages and tobacco products

2.79

139.4

140.9

142.9

1.4

2.5

Special aggregates

Core CPI3

84.91

120.6

121.3

122.1

0.7

1.2

All-items CPI excluding energy

91.44

119.7

120.1

121.0

0.7

1.1

Energy4

8.56

160.1

160.2

162.6

1.5

1.6

Gasoline

4.62

186.1

179.5

183.7

2.3

-1.3

All-items CPI excluding food and energy

74.85

116.9

117.3

118.2

0.8

1.1

Goods

48.18

115.2

114.2

115.6

1.2

0.3

Services

51.82

130.1

131.9

132.5

0.5

1.8

1.2011 CPI basket weights at January 2013 prices, Canada, effective February 2013. Detailed weights are available under the Documentation section of survey 2301 (www.statcan.gc.ca/imdb-bmdi/2301-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 CPI’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, consult the Bank of Canada website (www.bankofcanada.ca/rates/indicators/key-variables/inflation-control-target/).

4. The special aggregate “Energy” includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles.

 

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CPI Up A Little to Start 2014 in Canada

Friday our friends at Stats Canada came out with their Consumer Price Index for the year ending in January 2014 and it ran (year over year) at 1.5% (the previous month it was at 1.2%) which continues on with the less than 2.0% goals set by the Bank of Canada.

The graph showing inflation looks more dramatic than it actually is, given it is bobbing up and down around 2.0% mostly over the past little while.

Inflation from Stats Canada

Inflation for the Past Little While (courtesy Stats Canada)

One of the leading contributors is the price of electricity, and in Ottawa this is a very hot topic with Ottawa Hydro “changing their billing periods” and thus messing around with billing amounts and such. Ellen Roseman has written an article in the Ottawa SUN about it and there have been many horror stories so far with this “small administrative change”. Ontario Hydro has also promised astronomical fee rate hikes, that may make more of us look at Solar and other alternate power ideas much more seriously.

Stats Canada highlights this in the following statement:

The year-over-year increase in the CPI was led by higher shelter costs, which rose 2.1% in January. This followed a 1.9% gain in December. Electricity prices increased 4.7% in the 12 months to January, after rising 4.1% the previous month. Consumers also paid more for rent (+1.6%) and for homeowners’ home and mortgage insurance (+5.4%) in January compared with the same month a year earlier.

The scary part of this is for Ontarians, this is only going to get worse for the next few years. Thanks Minister Chiarelli for sharing this gift with us.

Actual Stats Canada

Actual CPI For Past Little While (courtesy Stats Canada)

Inflation last year at this time?

Inflation at this time last year was 0.5%, holy cow!

The Big Book of Price Increases

No relation to the Simpson’s own Big Book of British Smiles, but one of the large price tables from the Stats Canada website, well worth checking out.

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

 

Relative importance1

January 2013

December 2013

January 2014

Dec 2013 to
Jan 2014

Jan  2013
to Jan  2014

 

%

(2002=100)

% change

All-items Consumer Price Index (CPI)

100.002

121.3

122.7

123.1

0.3

1.5

Food

16.60

131.6

132.5

133.0

0.4

1.1

Shelter

26.26

127.8

129.9

130.5

0.5

2.1

Household operations, furnishings and equipment

12.66

113.5

114.7

114.7

0.0

1.1

Clothing and footwear

5.82

87.9

89.4

89.2

-0.2

1.5

Transportation

19.98

126.7

128.5

129.2

0.5

2.0

Health and personal care

4.93

118.5

118.1

118.3

0.2

-0.2

Recreation, education and reading

10.96

103.7

105.3

104.7

-0.6

1.0

Alcoholic beverages and tobacco products

2.79

138.9

141.2

140.9

-0.2

1.4

Special aggregates
Core CPI3

84.91

119.6

121.0

121.3

0.2

1.4

All-items CPI excluding energy

91.44

118.7

119.9

120.1

0.2

1.2

Energy4

8.56

152.8

158.9

160.2

0.8

4.8

Gasoline

4.62

171.6

179.7

179.5

-0.1

4.6

All-items CPI excluding food and energy

74.85

115.9

117.1

117.3

0.2

1.2

Goods

48.18

112.9

113.8

114.2

0.4

1.2

Services

51.82

129.6

131.7

131.9

0.2

1.8

1. 2011 CPI basket weights at January 2013 prices, Canada, effective February 2013. Detailed weights are available under the Documentation section of survey 2301 (www.statcan.gc.ca/imdb-bmdi/2301-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 CPI’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, consult the Bank of Canada website (www.bankofcanada.ca/rates/indicators/key-variables/inflation-control-target/).

4. The special aggregate “Energy” includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles.

 

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Christmas CPI Data Ho Ho Ho

No, I am not commenting about the Supreme Court striking down parts of the new Anti-Prostitution laws (ok, another cheap pop), no our Amigos at Stats Canada had a festive gift for Canadians on Friday publishing the Consumer Price Index numbers for November 2013.

To quote our good friends exactly:

The Consumer Price Index (CPI) rose 0.9% in the 12 months to November, following a 0.7% increase in October. November marked the 7th time in the last 13 months in which the CPI increased less than 1.0% on a year-over-year basis.

That number looks pretty darn low doesn’t it? Many pensions have a “COLA” that only kicks in if the CPI is over 2.0%, so this might mean no increase this year. It doesn’t feel like things are not getting more expensive quickly, but then again, I am a paranoid loony when it comes to Inflation.

 

Inflation since 2008, seems low for now, don’t it?

A more telling quote from the survey said:

The energy component of the CPI, which includes electricity, natural gas, fuel oil and gasoline, increased 2.3% on a year-over-year basis in November, after decreasing 1.6% in October. The CPI excluding energy rose 0.8% in November compared with the same month last year, following a 0.9% rise in October.

So again Energy is actually flying high, and in Ontario with Electrical costs ready to sky rocket over the next couple of years, that could change these numbers a great deal. Makes you want to investigate Solar panels more closely, doesn’t it?

Seasonally Adjusted CPI since 2008

The Big Table

As usual I include one of the many tables supplied by Stats Canada, have a look and note that Alcohol continues to increase in cost too (how Grinchy for this holiday season).

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

 

Relative importance1

November 2012

October 2013

Nov 2013

October to
Nov 2013

Nov 2012
to Nov 2013

 

%

(2002=100)

% change

All-items Consumer Price Index (CPI)

100.002

121.9

123.0

123.0

0.0

0.9

Food

16.60

131.4

131.7

132.8

0.8

1.1

Shelter

26.26

127.5

129.2

129.8

0.5

1.8

Household operations, furnishings and equipment

12.66

113.7

114.7

114.8

0.1

1.0

Clothing and footwear

5.82

92.5

94.0

92.1

-2.0

-0.4

Transportation

19.98

127.3

128.5

128.0

-0.4

0.5

Health and personal care

4.93

118.7

117.9

118.0

0.1

-0.6

Recreation, education and reading

10.96

106.1

106.9

106.2

-0.7

0.1

Alcoholic beverages and tobacco products

2.79

138.3

141.0

141.1

0.1

2.0

Special aggregates
Core CPI3

84.91

120.2

121.6

121.5

-0.1

1.1

All-items CPI excluding energy

91.44

119.3

120.3

120.3

0.0

0.8

Energy4

8.56

153.8

157.0

157.4

0.3

2.3

Gasoline

4.62

175.9

178.6

176.6

-1.1

0.4

All-items CPI excluding food and energy

74.85

116.7

117.8

117.5

-0.3

0.7

Goods

48.18

113.8

114.3

114.3

0.0

0.4

Services

51.82

129.9

131.8

131.8

0.0

1.5

1. 2011 CPI basket weights at January 2013 prices, Canada, effective February 2013. Detailed weights are available under the Documentation section of survey 2301 (www.statcan.gc.ca/imdb-bmdi/2301-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 CPI’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, consult the Bank of Canada website (www.bankofcanada.ca/rates/indicators/key-variables/inflation-control-target/).

4. The special aggregate “Energy” includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles.

 

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Low Flying Prices: Inflation at 1.1% for September

Last week our friends at Stats Canada published their monthly Consumer Price Index report which showed that prices continue to look like they are slowly increasing at 1.1% year over year, but again, that is open to interpretation as well.

Stats Canada’s overview was simply:

Higher shelter costs led the rise in the CPI. Year-over-year price increases for food and transportation were also contributing factors. The health and personal care index was the only major component to decline in September compared with the same month a year ago.

So the “housing bubbles” continue to contribute, and the pendulum price swings of Gasoline seem to soften the blow this month (see the large table at the end for a further elaboration on that comment).

Inflation for Past 5 Years

The problem with the gasoline pendulum pricing is that it is a pendulum that is not nailed down and it continues to move to a higher price (i.e. the price is never going to drop back to 80 cents a liter (at least not until alternate fuels come seriously into play)), so while sometimes it is way up and sometimes it is way down it still moves higher over time.

The Adjusted Price Index for the Past 5 Years

Prices continue to go up, there is no escaping this and if your “investments” aren’t growing at least this much you are falling behind (yes I am stating the blindingly obvious yet again, but sometimes the obvious is important to repeat, just like sometimes the obvious is important to repeat).

Bank of Canada’s core index

Remember that the central bank has its own CPI measurement and that is what they use to decide whether to raise interest rates, or make monetary policies more conservative (or restrictive). So far we are safe (again):


The Bank of Canada’s core index rose 1.3% in the 12 months to September, matching the increase in August.

The Big Table

As usual I urge you to go over to the Stats Canada Web Site and look at the data yourself (and don’t just believe bloggers or the Talking heads on TV), the data is quite interesting:

Table 3 Consumer Price Index and major components - Seasonally adjusted1

July 2013

August 2013

September
2013

July to
August 2013

August to
September 2013

(2002=100)

% change

All-items Consumer Price Index (CPI)

122.9

123.0

123.2

0.1

0.2

Food

132.1

132.6

132.7

0.4

0.1

Shelter

128.8

128.8

129.0

0.0

0.2

Household operations, furnishings and equipment

114.6

114.4

114.4

-0.2

0.0

Clothing and footwear

92.9

93.0

91.9

0.1

-1.2

Transportation

129.4

129.6

130.0

0.2

0.3

Health and personal care

118.2

118.2

118.4

0.0

0.2

Recreation, education and reading

106.3

106.6

106.3

0.3

-0.3

Alcoholic beverages and tobacco products

140.5

140.4

140.9

-0.1

0.4

Special aggregates
Core CPI2

121.2

121.2

121.3

0.0

0.1

All-items CPI excluding food and energy3

117.3

117.3

117.4

0.0

0.1

1.A seasonally adjusted series is one from which seasonal movements have been eliminated. Each month, the previous month’s seasonally adjusted index is subject to revision. On an annual basis, the seasonally adjusted values for the last three years are revised with the January data release. Users employing CPI data for indexation purposes are advised to use the unadjusted indexes. For more information on the availability and uses of seasonally adjusted CPI data, please see the Definitions, data sources and methods section of survey 2301.

2.The Bank of Canada’s core index excludes eight of the CPI’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/indicators/key-variables/inflation-control-target/).

3.The special aggregate “Energy” includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles.

 

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