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Deflation again! CPI Down for July 2009 (sort of)

in Bank of Canada, Inflation, Stats Canada

These are the numbers from July 2009, as the recovery slowly started from the complete plotz of 2008.

Stats Canada came out with another interesting set of CPI numbers showing (in a way) that our deflationary spiral is accelerating (if you consider a 0.3% drop the previous month and the alleged 0.9% drop in June as a significant acceleration). Soon I’ll be able to buy bread for 2 cents a loaf? No, not at all likely, the reason we have a “drop” in the CPI this month is Energy Products mostly (a 23.4% decline year over year in that sector), and remember those prices moderated late last year, so that drag on the CPI will disappear as a factor in a few months too.

The CPI excluding energy (not seasonally adjusted) is actually up 1.8% (which is still below the Bank of Canada’s goals for inflation), however Food as a component is roaring ahead with a 5.0% (year over year) price increase (wish my investments had that kind of growth).

CPI For Past Little While
CPI For Past Little While

Gas prices

This graph shows how gas prices are lower right now, but look at the 2008 graph and how prices started to “moderate” in August and then dropped like a stone for the rest of the year. That damping force will be gone soon from the CPI numbers (so my bet is inflation is going to start moving up the charts again).

Gas Prices Last Year to This
Gas Prices Last Year to This

Housing costs have dropped as well with the price of Natural Gas dropping  and the price of houses moderating as well (Shelter portion of the index dropped by 2.0%).

Price of Sin increases

The Sin portion of the Index (OK Alcoholic Beverages and Tobacco Products) is up a healthy 3.1% year over year as well, which means we can’t even drown our sorrows without paying more (for shame!).

The BIG Table

Have a look at the non-adjusted table values, always an interesting read.

 Relative importance2July 2008July 2009June 2008 to June 2009July 2008 to July 2009
 Unadjusted
    % change
All-items100.003115.8114.7-0.3-0.9
Food17.04116.5122.35.55.0
Shelter26.62123.3120.8-0.8-2.0
Household operations and furnishings11.10104.4107.12.92.6
Clothing and footwear5.3693.391.3-1.3-2.1
Transportation19.88125.7114.3-7.7-9.1
Health and personal care4.73108.5112.53.83.7
Recreation, education and reading12.20103.2104.30.91.1
Alcoholic beverages and tobacco products3.07127.6131.53.13.1
All-items (1992=100) 137.8136.5-0.2-0.9
Special aggregates     
Goods48.78112.1107.7-2.7-3.9
Services51.22119.4121.62.01.8
All-items excluding food and energy73.57110.4111.51.31.0
Energy9.38169.1129.6-19.0-23.4
Core CPI482.71111.7113.71.91.8

Inflation in 2009

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