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Inflation Lower?

Well kind of, I guess, the year over year rate for January 2007-08 is 2.2% (adjusted), which is lower than the previous month’s 2.4% rate, which sounds good at first blush.

The following quote made my left eye brow go up (my Mr. Spock, “Fascinating” look):

For the fifth straight month, growth in the all-items index was due mainly to the 12-month rise in gasoline prices and mortgage interest cost. The upward pressure on the all-items index of these two components was mitigated, to some extent, by the one-percentage-point reduction in the goods and services tax (GST) that took effect in January, and by the reduction in motor vehicle prices.

But interest rates have dropped, and gas prices are stable at about $1.00 a liter (here in Ottawa at least). Does this mean next month’s rates are going to be lower? I don’t think so, because shouldn’t this higher price of energy and gas pass through the system and be reflected in prices of Food, Clothing, and anything else that is shipped over long distances?


The Core Index actually dropped by 0.2% from December to January? This is confusing as heck to me at times, and I really wish someone would do a documentary that would explain the thing in terms most Canadians could understand.

Consumer Price Index Table

You’ll need to go to the Stats Canada web page for that one, for some reason I can’t import the table, so link here Stats Canada Inflation Table.

Feel Free to Comment

  1. I can’t agree with you more on the documentary, I have no clue what this really means either. Are they basically saying, inflation would be way off target (3.2%) had the government not cut the GST? That’s what it looks like to me.

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