Expensive Food and Shelter in April in Canada

Friday Stats Canada published their Consumer Price Index report for April 2016 and the trend of  a deceptively low CPI increase of 1.7% caused by lower energy and gasoline prices (without Gasoline CPI is up 2.0%). That is what you will find from the summary posted on the Stats Canada website, but as we have learned, if you dig a little deeper, you find many more interesting tidbits of information.

CPI

The 12-month change in the Consumer Price Index (CPI) and the CPI excluding gasoline for Past 5 Years

The detailed report goes into a little more detail and gives us the following interesting specifics.

Main contributors to the 12-month change in the CPI:

Main upward contributors:

  1. Purchase of passenger vehicles (+4.6%)
  2. Electricity (+6.5%)
  3. Food purchased from restaurants (+2.7%)
  4. Fresh vegetables (+11.7%)
  5. Homeowners’ replacement cost (+2.3%)

Main downward contributors:

  1. Gasoline (-5.8%)
  2. Natural gas (-12.8%)
  3. Mortgage interest cost (-1.5%)
  4. Fuel oil (-19.3%)
  5. Passenger vehicle insurance premiums (-0.9%)

As we have been seeing for the past few months, eating fresh healthy food is still bloody expensive. On the positive side (and in contradiction to the Ontario Government’s new view on Energy), Natural Gas being cheaper should help the sale of Natural Gas clothes driers and fireplaces.

Bank of Canada’s core index

The Bank of Canada’s core index increased 2.2% in the 12 months to April, after rising 2.1% in March.

This is within the Bank’s good threshold, so this shouldn’t be the main reason to raise interest rates.

Reports from the Past While.

If you want to have a walk down memory lane about how prices have gone up, here you go.

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Friday, Stats Canada published their monthly Consumer Price Index Report, and showed that while on the surface Prices are not going up much, if you look a little closer, eating Good Food (i.e. Fresh Veggies and Fruit) continues to sky rocket (in comparison to the over all index).

There actual statement in their generic report states:

Excluding gasoline, the CPI rose 1.9% year over year in March, matching the increase in February.

Six of the 8 major categories had increases, which suggests that if you claim that CPI is running at 1.3%, there must be some components dropping significantly to reflect this low number, and (as usual) Gasoline, Natural Gas, and Fuel Oil are the big ones.

CPI For Past 5 Years

Five Year CPI Graph with and Without Gasoline

Main contributors to the 12-month change in the CPI:

Main upward contributors:

  1. Purchase of passenger vehicles (+3.2%)
  2. Electricity (+7.5%)
  3. Fresh vegetables (+14.9%)
  4. Food purchased from restaurants (+2.6%)
  5. Fresh fruit (+11.3%)

Main downward contributors:

  1. Gasoline (-13.6%)
  2. Natural gas (-17.4%)
  3. Fuel oil (-25.8%)
  4. Mortgage interest cost (-1.5%)
  5. Women’s clothing (-1.8%)

As you can see nothing you can eat is getting cheaper, and note also that most power and resource types are dropping in price, however, electricity (allegedly the power of the future) is still going up in price. In Ontario the price increase is even more marked.

Bank of Canada’s core index

The Bank of Canada’s core index increased 2.1% in the 12 months to March, after rising 1.9% in February.

This suggests the Bank of Canada will not be able to blame Inflation as a reason to raise Interest Rates (for now).

Reports from the Past While.

If you want to have a walk down memory lane about how prices have been going up, here you go.

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Food Prices Continue to Rise

It continues to be more expensive to eat in Canada, and worse, it is really expensive to eat healthy, which is what we found out on Friday from Stats Canada when they published their Consumer Price Index for February 2016 report. As usual the report starts with an optimistic statement:

The Consumer Price Index (CPI) rose 1.4% in the 12 months to February, after increasing 2.0% in January.

However, as we have learned the devil is in the details of the report, and those very interesting details you find in, The Consumer Price Index (62-001-X), which has a lot more interesting details. That report has a much more interesting detailed set of highlights which include:

Main upward contributors:

  1. Purchase of passenger vehicles (+5.0%)
  2. Fresh vegetables (+17.2%)
  3. Electricity (+6.3%)
  4. Fresh fruit (+14.4%)
  5. Food purchased from restaurants (+2.7%)

Main downward contributors:

  1. Gasoline (-13.1%)
  2. Natural gas (-15.3%)
  3. Women’s clothing (-2.9%)
  4. Mortgage interest cost (-1.4%)
  5. Fuel oil (-19.3%)

Fresh fruit and vegetables are always more expensive in the winter, but this is a little more than just that. The other one I keep noticing is the price of electricity keeps going up. Given it seems to be the energy of the future, I keep wondering what is driving the price up? Here in Ontario it can be attributed to bad choices by Ontario Hydro that we are all having to pay off, but is this seen everywhere else?

The other head scratcher for me is given everyone says we are in a “housing bubble” why isn’t Shelter a bigger contributor. Shelter was only up 1.2% year over year? That seems odd to me. Even odder are some of the components

  • Owned accommodated is up 1.8% (year over year), however as part of that there are lower mortgage rates.
  • Home and Mortgage insurance is up 6.5% year over year? I can attest to that one, just got my updated insurance for the year, holy cow!
  • Property tax and special charges are up 3.0%, again, no surprise for me, not that I like it.
  • Maintenance and repairs are up as well at 3.5%
  • Lower heating costs (much lower) is what is causing the ownership rate to be so low

So owning a home is getting much more expensive, not just the price of buying a house. Seems to point to the “Renting may not be a bad idea” argument.

We all know that what the Bank of Canada thinks about inflation is important.

Bank of Canada’s core index

The Bank of Canada’s core index increased 1.9% in the 12 months to February, after rising 2.0% in January.

This suggests that inflation will not be cited as a reason to raise interest rates, but that doesn’t mean the rates aren’t going to go up (soon).

CPI

CPI with and Without Gasoline for Past 5 Years

Reports from the Past While.

If you want to have a walk down memory lane about how prices have been going up, here you go.

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Veggies up 18.2 pct in Canada

Friday Stats Canada published their monthly Consumer Price Index Report (for January) and it seems that things are starting to appear to be heating up in terms of prices. This actually means that this month gasoline prices did not mask (as well) the continuing rise in the price of food across Canada.

Some important points made in the overview of the main report

  • Inflation rose 2.0% in the 12 months to January, after increasing 1.6% in December“. While this is not overly high, it does put it closer to the point where the Bank of Canada might step in and do something about it (see later on about those numbers).
  • In January, gasoline prices were up on a year-over-year basis for the first time since October 2014; this occurred despite a monthly decline of 6.0%.” Upward pressure from Gasoline prices means the overall index value is not as supercilious as in previous months.
  • Prices rose in seven of the eight major components on a year-over-year basis in January, with the food and transportation indexes contributing the most to the rise in the CPI. The clothing and footwear index was the only major part to decline on a year-over-year basis in January.

The telling part of the report is that it does show where we are “taking it in the neck” in terms of higher prices with:

Main contributors to the 12-month change in Inflation

Main upward contributors:

  1. Purchase of passenger vehicles (+4.0%)
  2. Fresh vegetables (+18.2%)
  3. Electricity (+6.0%)
  4. Homeowners’ home and mortgage insurance (+8.8%)
  5. Fresh fruit (+12.9%)

Main downward contributors:

  1. Natural gas (-18.6%)
  2. Telephone services (-2.5%)
  3. Mortgage interest cost (-1.3%)
  4. Passenger vehicle insurance premiums (-1.6%)
  5. Fuel oil (-15.0%)

No real surprise there, with Fresh Fruit and Veggies being much higher in price (year over year). Interesting that Insurance continues to be mentioned here as well.

The overall graphic is illuminating as well:

Price Inflation

12 Month Price increases compared to last month

Drives home the fact that everything is up year over year.

One more fun graphic of inflation with and without gasoline.

Inflation

Inflation for Past 5 years with and without Gasoline

That is some interesting variance.

Bank of Canada’s core index:

The Bank of Canada’s core index rose 2.0% in the 12 months to January, following a 1.9% increase in December.

So the Bank of Canada and Stats Canada’s numbers are at least closer than normal.

Reports from Previous Months in 2015

If you want to have a walk down memory lane about how prices have been going up, here you go.

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Food Prices up 4.1% For 2015 in Canada


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To the surprise of absolutely no one in Canada who has walked into a grocery store lately, Stats Canada announced on Friday that the Inflation rate (year over year) for December 2015 (and thus effectively the year 2015) rate of inflation was 1.6%, which seems gosh darn just grand, but as usual this smelly onion’s aroma is only divulged as you look deeper in the layers of the numbers published.

Cauliflower” by User Anthony DiPierro on en.wikipedia – Licensed under Public Domain via Commons

As we can see from this simple graphic, the numbers are a little cock-eyed if you look a little closer to the details of the report. In the gory details of the report you find a much richer explanation of what is going on in terms of the price of food:

Consumers paid 3.7% more for food in December compared with the same month a year earlier. Prices for food purchased from stores were up 4.1% year over year in December, following a 3.7% increase the previous month. The acceleration was mainly attributable to the fresh vegetables and fresh fruit indexes, which rose more on a year-over-year basis in December than in the previous month. In contrast, the meat index increased less in the 12 months to December (+2.4%) than in November (+3.9%). Prices for food purchased from restaurants rose 2.8% year over year in December, matching the increase in November.

A more detailed part of the report goes into even more interesting details:

Main contributors to the 12-month change in the CPI:

Main upward contributors:

  1. Purchase of passenger vehicles (+3.1%)
  2. Fresh vegetables (+13.3%)
  3. Homeowners’ home and mortgage insurance (+8.9%)
  4. Fresh fruit (+13.2%)
  5. Electricity (+3.8%)

Main downward contributors:

  1. Gasoline (-4.8%)
  2. Natural gas (-12.9%)
  3. Telephone services (-2.5%)
  4. Mortgage interest cost (-1.3%)
  5. Fuel oil (-16.8%)

Hence all of the discussions about the head of Cauliflower costing $8 in some places? The serious part of this, is that homeless shelters and similar services are now having problems with their food budgets for the winter. The fact that home and mortgage insurance rates are spiking is another interesting issue that not many folks are talking about?

Bank of Canada’s core index

Remember that the Bank of Canada’s measure of inflation is a bit different, and as they are the ones that might raise interest rates in response to any inflationary spirals, we should check what they think about inflation.

The Bank of Canada’s core index was up 1.9% in the 12 months to December, following a 2.0% rise in November.

Reports from Previous Months in 2015

If you want to have a walk down memory lane about how prices have been going up, here you go.

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