Inflation Jumps for April to 1.7%

As suspected the CPI for April is up, says Stats Canada. The rate for March year over year was 1.4% but for April year over year it is 1.7%, which seems to suggest the high price of gas is starting to make it through the system and is being reflected in consumer prices.

Gasoline was the main contributor to both the acceleration and the 12-month increase of the all-items index. Gasoline prices rose 11.6% between April 2007 and April 2008, compared with a 7.9% increase posted a month earlier.

There was no way higher gas prices was not going to start this kind of a cascade, and now the question is what is the Bank of Canada going to do about interest rates?

The interesting number I see is that food, the one commodity that I would have been positive was very affected by high gas prices only was up 1.2%, which seems odd (or maybe it just hasn’t gone through the system yet).

Consumer Price Index and major components
(2002=100)
	Relative importance	April 2008	March 2008	April 2007	March to April 2008	April 2007 to April 2008
		Unadjusted
					% change
All-items	100.00	113.5	112.6	111.6	0.8	1.7
Food	17.04	113.5	112.6	112.2	0.8	1.2
Shelter	26.62	121.2	120.1	116.2	0.9	4.3
Household operations and furnishings	11.10	104.4	104.1	103.3	0.3	1.1
Clothing and footwear	5.36	94.3	96.0	97.7	-1.8	-3.5
Transportation	19.88	120.1	117.8	118.6	2.0	1.3
Health and personal care	4.73	108.3	107.9	106.8	0.4	1.4
Recreation, education and reading	12.20	101.6	101.3	100.9	0.3	0.7
Alcoholic beverages and tobacco products	3.07	126.7	126.6	124.5	0.1	1.8
All-items (1992=100)		135.1	134.1	132.8	0.7	1.7
Special aggregates
Goods	48.78	109.2	108.1	109.2	1.0	0.0
Services	51.22	117.7	117.1	113.9	0.5	3.3
All-items excluding food and energy	73.57	109.9	109.6	108.7	0.3	1.1
Energy	9.38	150.2	143.2	139.1	4.9	8.0
Core Consumer Price Index (CPI)	82.71	111.2	110.9	109.6	0.3	1.5
1. 2005 CPI basket weights at April 2007 prices, Canada – Effective May 2007. Detailed weights are available under the Documentation section of survey 2301 at (www.statcan.gc.ca/english/sdds/index.htm). 2. Figures may not add to 100% due to rounding. 3. The measure of the Core CPI excludes from the all-items CPI the effect of changes in indirect taxes and eight of the most volatile components identified by the Bank of Canada: fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuel; gasoline; inter-city transportation; and tobacco products and smokers’ supplies. For additional information on the Core CPI index, please consult the Bank of Canada website: (www.bankofcanada.ca/en/inflation/index.htm).

Stay tuned folks looks like a bumpy ride ahead!