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Gasoline Pumps Inflation
Stats Canada announced the CPI for January and it looks like Inflation is starting to become more of a factor for the Bank of Canada to think about. Year over year for January Consumer Prices were up 1.9% (remember that in December year over year it was 1.3%), so the 0.6% jump is a big one.
Black Gold, Texas Tea
Yes, it is Gasoline prices that are helping fuel this inflationary jump, and this could mean follow on price increases as this price increase percolates through the system.
The increase in the all-items Consumer Price Index (CPI) was due primarily to gasoline prices. In January, gasoline prices were 23.9% higher than they were in January 2009. This follows a 25.6% rise in the 12 months to December 2009.
Gasoline prices exerted upward pressure on the CPI for the third consecutive month, as a result of price volatility in the second half of 2008 and the first half of 2009. Prices at the pump have been relatively stable since July 2009.
More importantly the Bank of Canada’s Core rate (which is what they start looking at for when they wish to increase interest rates) is now around 2.0% (year over year) up from 1.5% in December, which may cause the Bank of Canada think tank to start re-thinking when they plan on turning on the Interest Rate economy brakes, which most think is June July timeframe, but if we see another Inflationary jump next month, it may be sooner.
The Big Table of CPI
For those who love details and numbers, I present the Big Table for your perusal:
|Relative importance||Jan-09||Dec-09||Jan-10||Dec 2009 to Jan 2010||Jan 2009 to Jan 2010|
|Household operations, furnishings and equipment||11.1||105.7||107.5||107.9||0.4||2.1|
|Clothing and footwear||5.36||91.8||90.6||90.1||-0.6||-1.9|
|Health and personal care||4.73||110.4||113.2||113.8||0.5||3.1|
|Recreation, education and reading||12.2||99.7||102.8||101.1||-1.7||1.4|
|Alcoholic beverages and tobacco products||3.07||129.2||131.2||131.1||-0.1||1.5|
|All-items excluding food and energy||73.57||110.3||111.7||111.6||-0.1||1.2|