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Consumer Price Index is Trending Up Again October 2009

Sorry but I am derailing my discussions of Risk until Monday of next week with this week’s CPI numbers coming out and the Random Thoughts for Friday.

CPI Delta Returns to Positive

Yes the CPI for October is up 0.1% year over year (as opposed to last month’s year over year which was negative), this means a modest increase overall in prices, which sounds good, but as usual the numbers may not reflect exactly what is really going on with prices in the marketplace.

CPI up to October this year

Well you might ask the question, how much did energy affect this whole thing? Have a look at this graph:

CPI with and Without Energy
CPI with and Without Energy

Six of Eight Components Up

The bad part about this is that energy still is buffering the index from reflecting real price increases in most areas of the CPI itself. Stats Canada points out:

Major components in the CPI recording price increases in October were: food; household operations, furnishings and equipment; recreation, education and reading; health and personal care; clothing and footwear; and alcoholic beverages and tobacco products.

I am getting tired of the price gouging on SIN items like liquor and smokes (luckily lottery ticket prices aren’t going up in prices, or I’d have nothing to buy on Fridays).

Bank of Canada Core Up

The Bank of Canada’s Core rate is at 1.8% year over year, which is creeping into the “optimal” range for the Bank of Canada, but it also means that if prices go up a little bit more (as a percentage), then we might see some action from the central bank in this area (i.e. Bank Rate hikes).

The Big Table

  Relative import October 2008 October 2009  
        % change
All-items 100.00 114.5 114.6 -0.9 0.1
Food 17.04 117.4 120.1 2.8 2.3
Shelter 26.62 123.2 121.2 -1.8 -1.6
Household operations and furnishings 11.10 105.2 107.9 2.2 2.6
Clothing and footwear 5.36 94.4 95.0 -1.2 0.6
Transportation 19.88 117.0 113.4 -7.2 -3.1
Health and personal care 4.73 109.2 112.9 3.9 3.4
Recreation, education and reading 12.20 103.0 104.5 1.0 1.5
Alcoholic beverages and tobacco products 3.07 128.0 131.4 2.6 2.7
All-items (1992=100)   136.3 136.4 -0.9 0.1
Special aggregates          
Goods 48.78 108.9 107.0 -3.7 -1.7
Services 51.22 120.0 122.1 1.8 1.8
All-items excluding food and energy 73.57 110.6 112.0 0.9 1.3
Energy 9.38 147.5 128.8 -18.7 -12.7
Core CPI 82.71 112.2 114.2 1.5 1.8

Reader’s Note: Tomorrow will be my regular Random Thoughts post, and the conclusion of my Risk and Life postings will be on Monday.

Inflation in 2009

Feel Free to Comment

  1. Yeah, it’s been a frustrating year. I am an unusually small consumer of energy (live in an apartment, and I drive very little), so my actual cost of living has gone up more substantially than someone whose consumption habits are more in line with the CPI calculation. So the lack of raises that has been justified by a slow economy and no-inflation has just eaten further and further into my savings rate.

    Gahh. Here’s hoping the next year will be better.

    1. @MJM

      Surprisingly the SIN items are at record highs, so yer smokes and booze are pretty darn expensive, while housing and shelter are still high they are off their record highs of a while ago

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