I missed that on Friday our friends at Stats Canada posted the CPI numbers (Inflation) for August and year over year prices rose a small 1.1% which is better news, given the July numbers showed a 1.3% CPI increase (year over year).

A telling area to watch is transportation which includes a few key components:

Transportation costs rose 1.3% in the 12 months to August, following a 2.7% advance in July. On a year-over-year basis, consumers paid 2.2% more for gasoline in August, after paying 6.1% more in July. In addition, prices for the purchase of passenger vehicles increased 0.6% in the 12 months to August, a smaller rise than in July (+2.0%).

Gasoline prices have dropped lately but have been higher in Ottawa (was at $1.31 a liter and now they are down to $1.23 a liter) . The pendulum of gasoline prices does seem to be messing around with the overall numbers (I am sure next month we will see a drop in gas prices, which will bring the CPI down (maybe?)).

Numbers Don’t Lie Inflation Over The Past 5 Years

The other issue is that while Gasoline yo yos up and down, other things like food just keep going up, at least that is my point of view whilst doing the family groceries.

Bank of Canada’s core index

As usual we need to look at what the Bank of Canada thinks inflation is running at, since they will be the ones to eventually decide whether the economy needs to slow down (i.e. when do interest rates kick back in to slow everything down):

The Bank of Canada’s core index rose 1.3% in the 12 months to August, following a 1.4% increase in July.

On a monthly basis, the seasonally adjusted core index posted no change in August, after rising 0.1% in the previous month.

Again, nothing obvious to cause the Bank of Canada folks to feel that anything is over-heating, but they may raise interest rates to just to remove the stimulus in the economy? Yes, I realize I do say that every month, but like the weather man, I will be right one day.

More Information

Stats Canada also publishes even more interesting information that is worth having a look at, so this month let’s bring up the Big Table on prices seasonally adjusted:

Consumer Price Index and major components – Seasonally adjusted1

June 2013

July 2013

August 2013

June to July 2013

July to August 2013

(2002=100)

% change

All-items Consumer Price Index (CPI)

122.8

122.9

123.0

0.1

0.1

Food

132.2

132.1

132.6

-0.1

0.4

Shelter

128.5

128.8

128.8

0.2

0.0

Household operations, furnishings and equipment

114.2

114.6

114.4

0.4

-0.2

Clothing and footwear

92.8

92.9

93.1

0.1

0.2

Transportation

129.4

129.4

129.5

0.0

0.1

Health and personal care

118.2

118.2

118.2

0.0

0.0

Recreation, education and reading

106.0

106.3

106.6

0.3

0.3

Alcoholic beverages and tobacco products

140.9

140.5

140.4

-0.3

-0.1

Special aggregates
Core CPI2

121.1

121.2

121.2

0.1

0.0

All-items CPI excluding food and energy3

117.2

117.3

117.3

0.1

0.0

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 (www.statcan.gc.ca/imdb-bmdi/2301-eng.htm).

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.

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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Inflation Up a Little in February in Canada

Back on Wednesday last week (hey I’ve taken some time off, cut me some slack), our friends at Stats Canada published their Consumer Price Index Report for February 2013  and it’s news continued to be encouraging, in that inflation continues to run at a relatively low 1.2% (year over year).

Last month the CPI rate was at a petit 0.5% year over year so this is a 140% jump over last month’s rate, however it is still well below the traditional 2.0% HOLY CRAP INFLATION Line.

Inflation in Canada for Past Little While

CPI Yearly Rate for the Past Little While

That big jump at the end of the graph actually does look quite dramatic, doesn’t it?

Who was a big culprit in this steep jump? You guessed it gasoline, to quote our friends at Stats Canada:

Gasoline prices advanced 3.9% year over year in February following a 1.8% decrease in January. On a monthly basis, gasoline prices rose 8.4% in February, the largest monthly increase since May 2008.

I think I could have guessed that one without reading the report, given the gouging I have seen in the Ottawa area for Gas. The dramatic differences by area is interesting too (in Ottawa Gas yesterday was $1.24 per liter, in Carleton Place it was $1.15 and in Peterborough it was $1.27).

If you want a much more depressing picture, have a look at this one:

Seasonally Adjusted CPI for the Past Little While

Sad eh? Remember the rate started a while ago, but it sums up nicely how the price of everything has gone up!

Bank of Canada’s core index

Remember our amigos at the Bank of Canada do their inflationary calculations in a different way:


The Bank of Canada’s core index rose 1.4% in the 12 months to February, following a 1.0% advance in January.

On a monthly basis, the seasonally adjusted core index rose 0.4% in February, after increasing 0.1% in January.

So the advance in this index’s increase is only 40% higher, doubt this will be the reason the B of C might tighten their purse strings (but I have been wrong before).

The Really Big Table

The Big Tables are where you really see why things are so much more expensive, so check them all out at Stats Canada, but here is a good one to whet your appetite:

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

Relative import1 Feb 2012 January 2013 February 2013 January to February 2013 February 2012 to February 2013
% (2002=100) % change
All-items Consumer Price Index (CPI) 100.002 121.2 121.3 122.7 1.2 1.2
Food 16.60 130.4 131.6 132.9 1.0 1.9
Shelter 26.26 126.9 127.8 127.9 0.1 0.8
Household operations, furnishings and equipment 12.66 112.8 113.5 114.3 0.7 1.3
Clothing and footwear 5.82 91.9 87.9 91.4 4.0 -0.5
Transportation 19.98 127.8 126.7 130.3 2.8 2.0
Health and personal care 4.93 118.4 118.5 118.6 0.1 0.2
Recreation, education and reading 10.96 103.7 103.7 104.7 1.0 1.0
Alcoholic beverages and tobacco products 2.79 136.6 138.9 139.4 0.4 2.0
Special aggregates
Core CPI3 84.91 118.9 119.6 120.6 0.8 1.4
All-items CPI excluding energy 91.44 118.3 118.7 119.7 0.8 1.2
Energy4 8.56 156.9 152.8 160.1 4.8 2.0
Gasoline 4.62 179.2 171.6 186.1 8.4 3.9
All-items CPI excluding food and energy 74.85 115.6 115.9 116.9 0.9 1.1
Goods 48.18 114.1 112.9 115.2 2.0 1.0
Services 51.82 128.2 129.6 130.1 0.4 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 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 ).
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 at 0.5% for January in Canada, Wow that is Low!

Our friends at Stats Canada published on Friday the CPI for the year ending January 2013 and it was at a miniscule 0.5%, thanks to gas prices dropping (this may change quickly this month with gas prices shooting back up to $1.30 a liter here in Ottawa).

The Consumer Price Index (CPI) rose 0.5% in the 12 months to January, following a 0.8% gain in December. The main factor in the smaller increase in the CPI was gasoline prices, which fell 1.8% year-over-year in January after rising 1.0% in December.

Gas prices seem to be the yo-yo which is causing the inflation data to be a little hard to decipher in the past few months.  As can be seen from the following graphic, the Gas Index has been a little wild:

Gas Index Changes Past Little While

While the changes lately have not been as wild, it still is causing a lot of confusion when it comes to the Consumer Price Index. As I have harped on previously, fuel prices really do echo throughout the economy, since most things need to be delivered in some fashion or another.

Another interesting graphic on fuel’s effect on the CPI overall:

This is What Fuel Prices have been doing to the CPI

Our friends at Stats Can analysed and pointed out that:

Food prices increased 1.1% on a year-over-year basis in January following a 1.5% advance in December. This slower rise was mainly attributable to easing price increases for food purchased from stores, notably meat. January’s 0.6% year-over-year advance in the food purchased from stores component was the smallest since July 2010.

Shelter costs rose 0.6% in the 12 months to January, matching the increase in December. Rent and homeowners’ replacement cost was up on a year-over-year basis. Conversely, mortgage interest cost decreased 4.2%.

Here is the graph of the CPI over the past little while too:

CPI Over Past Little While

Bank of Canada View

Remember the Bank of Canada measures CPI in a little different way but their version of CPI is still low-ish:

The Bank of Canada’s core index rose 1.0% in the 12 months to January, following a 1.1% gain in December.

On a monthly basis, the seasonally adjusted core index rose 0.1% in January, matching the increase in December.

The Big Table

Here is the data from one of the BIG tables showing which categories had the biggest jump year over year and month over month:

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

Relative importance1

January 2012

December 2012

January 2013

Dec 2012
to Jan 2013

Jan 2012
to Jan 2013

%

(2002=100)

% change

All-items Consumer Price Index (CPI)

100.002

120.7

121.2

121.3

0.1

0.5

Food

15.99

130.2

131.2

131.6

0.3

1.1

Shelter

27.49

127.1

127.5

127.8

0.2

0.6

Household operations, furnishings and equipment

11.55

112.2

113.2

113.5

0.3

1.2

Clothing and footwear

5.31

89.3

89.2

87.9

-1.5

-1.6

Transportation

20.60

127.4

125.8

126.7

0.7

-0.5

Health and personal care

4.95

118.1

118.6

118.5

-0.1

0.3

Recreation, education and reading

11.20

102.6

105.3

103.7

-1.5

1.1

Alcoholic beverages and tobacco products

2.91

136.3

138.3

138.9

0.4

1.9

Special aggregates

Core CPI3

82.15

118.4

119.5

119.6

0.1

1.0

All-items CPI excluding energy

89.92

117.9

118.7

118.7

0.0

0.7

Energy4

10.08

155.5

151.9

152.8

0.6

-1.7

Gasoline

5.80

174.7

171.7

171.6

-0.1

-1.8

All-items CPI excluding food and energy

73.93

115.2

116.0

115.9

-0.1

0.6

Goods

47.80

113.6

112.6

112.9

0.3

-0.6

Services

52.20

127.8

129.7

129.6

-0.1

1.4

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/2301-eng.htm).
2.Figures may not add 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/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 Slowing for November in Canada

On Friday our friends left Canadians a Christmas Gift announcing that the Consumer Price Index increase year over year (ending in November) was only 0.8% (i.e. Inflation).

Consumer prices rose 0.8% in the 12 months to November, following a 1.2% gain in October. The November increase was the smallest year-over-year gain in the Consumer Price Index (CPI) since October 2009.

So prices are slowing, but for what reasons, you might ask? Gasoline prices are moderating (for now, but over Christmas expect price gouging at a very non-festive level (IMHO)) and thus CPI is moderating as well.

CPI For Past Little While in Canada

CPI for Past Little While

If you look at the following graph you’ll see how gasoline prices have moderated a little over the past little while too!

Gas Index For Past Little While in Canada

Gasoline Index for Past Little While in Canada

Given the new indications that our friends down south may have found a short term fix to their Gasoline gorging with their reserves in previously inaccessible areas, wonder if Gas prices may plummet as they did in the 80’s? Given China will continue needing Oil, maybe the prices will simply moderate, but what will this do to alternate energies, which relied on Oil being higher priced? Should be interesting for the next few years.

Bank of Canada’s core index

The Bank of Canada’s rate is a little higher, but nothing to cause them to want to raise interest rates (yet).

The Bank of Canada’s core index rose 1.2% in the 12 months to November, following a 1.3% increase in October.

On a monthly basis, the seasonally adjusted core index posted no change in November after increasing 0.1% in October.

The seasonally adjusted big picture graphic shows a drop of the curve (wow):

Seasonally Adjusted CPI over past little while

The Big Table

I love the big table because it shows you all the details of each part of the CPI, so have a look and see where you are paying even more these days:

 

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

 

Relative import1 Nov 2011 Oct 2012 Nov 2012 Oct to Nov 2012 Nov
2011
to Nov 2012
% (2002=100) % change
All-items Consumer Price Index (CPI) 100.002 120.9 122.2 121.9 -0.2 0.8
Food 15.99 129.2 130.5 131.4 0.7 1.7
Shelter 27.49 126.3 127.6 127.5 -0.1 1.0
Household operations, furnishings and equipment 11.55 112.1 113.5 113.7 0.2 1.4
Clothing and footwear 5.31 93.1 94.7 92.5 -2.3 -0.6
Transportation 20.60 127.6 128.6 127.3 -1.0 -0.2
Health and personal care 4.95 117.9 118.5 118.7 0.2 0.7
Recreation, education and reading 11.20 104.8 106.6 106.1 -0.5 1.2
Alcoholic beverages and tobacco products 2.91 135.8 137.8 138.3 0.4 1.8
Special aggregates
Core CPI3 82.15 118.8 120.2 120.2 0.0 1.2
All-items CPI excluding energy 89.92 118.2 119.2 119.3 0.1 0.9
Energy4 10.08 154.1 159.5 153.8 -3.6 -0.2
Gasoline 5.80 175.2 186.6 175.9 -5.7 0.4
All-items CPI excluding food and energy 73.93 115.7 116.7 116.7 0.0 0.9
Goods 47.80 113.8 114.5 113.8 -0.6 0.0
Services 52.20 127.8 129.8 129.9 0.1 1.6
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/2301-eng.htm).
2.Figures may not add 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/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 Lower in July in Canada 2012

Inflation moderated a little in July where the year over year rate was 1.3%, blamed mostly on new cars, restaurant food, meat, and electricity (a very eclectic blend of things in our lives), Stats Canada published with their Monthly Inflation Report for July 2012.

As can be seen from the following graph, the rate of increase is moderating, but it still continues to be positive, but for now well below 2.0% ( a magic level for the Bank of Canada).

12 Month CPI Rate for the Past Little While

The only place we are seeing a drop in price is footwear and clothing. The one area to watch closely is pointed out by our Stats Canada friends:

Food prices rose 2.1% in the 12 months to July following a 2.0% advance in June. These two increases were the lowest year-over-year gains in food prices since the beginning of 2011. Leading the July increase were higher prices for food from restaurants (+2.4%), meat (+5.3%) and cereal products (+3.7%). In contrast, prices for fresh vegetables declined for the fifth consecutive month.

This is worrisome given that most of eastern Canada is in a Level 2 drought, which will mean higher prices for food. We are already hearing that Apple production is down, and even with the rain that is finally arriving, it may not be enough.

CPI Index for the Past Little While

A slight dip in this graph is better news, but will the downward trend continue?

Bank of Canada’s core index

Remember that the Bank of Canada has their own way of measuring inflation, thus this month it is higher, but still under the magical 2.0% threshold:

The Bank of Canada’s core index rose 1.7% in the 12 months to July, following a 2.0% gain in June.

On a monthly basis, the seasonally adjusted core index was unchanged in July for the second consecutive month.

The Big Table

Here is one of the 3 Big tables published by Stats Canada, have a look at all of them:

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

Relative import1 July 2011 June 2012 July 2012 June to
July 2012
July 2011
to July 2012
% (2002=100) % change
All-items Consumer Price Index (CPI) 100.002 120.0 121.6 121.5 -0.1 1.3
Food 15.99 129.0 130.9 131.7 0.6 2.1
Shelter 27.49 125.9 127.0 127.2 0.2 1.0
Household operations, furnishings and equipment 11.55 110.7 113.1 113.0 -0.1 2.1
Clothing and footwear 5.31 89.7 90.5 89.1 -1.5 -0.7
Transportation 20.60 125.0 127.6 126.4 -0.9 1.1
Health and personal care 4.95 116.7 118.9 118.5 -0.3 1.5
Recreation, education and reading 11.20 106.8 106.7 107.2 0.5 0.4
Alcoholic beverages and tobacco products 2.91 136.1 137.5 137.6 0.1 1.1
Special aggregates
Core CPI3 82.15 117.3 119.4 119.3 -0.1 1.7
All-items CPI excluding energy 89.92 117.0 118.8 118.7 -0.1 1.5
Energy4 10.08 157.9 155.7 156.0 0.2 -1.2
Gasoline 5.80 182.5 180.2 180.1 -0.1 -1.3
All-items CPI excluding food and energy 73.93 114.3 116.2 115.8 -0.3 1.3
Goods 47.80 112.9 113.5 113.2 -0.3 0.3
Services 52.20 127.1 129.6 129.7 0.1 2.0
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/2301-eng.htm).
2. Figures may not add 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).
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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