Skip to content
Canajun Finances Home » Inflation up 1.9% Hold on Bumpy Ride Ahead!

Inflation up 1.9% Hold on Bumpy Ride Ahead!

Reader’s Note: Random Thoughts will return next week.

Also, watch for the First Big Cajun RRSP Software Giveaway! Coming real soon (once I figure out how it is going to work 🙂 ).

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.

CPI with and without energy
The 12-month change in the Consumer Price Index (CPI) and CPI excluding energy

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.

energy graph
Energy Graph

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 importanceJan-09Dec-09Jan-10Dec 2009 to Jan 2010Jan 2009 to Jan 2010
     % change 
Household operations, furnishings and equipment11.1105.7107.5107.90.42.1
Clothing and footwear5.3691.890.690.1-0.6-1.9
Health and personal care4.73110.4113.2113.80.53.1
Recreation, education and reading12.299.7102.8101.1-1.71.4
Alcoholic beverages and tobacco products3.07129.2131.2131.1-0.11.5
All-items (1992=100) 134.5136.61370.31.9
All-items excluding food and energy73.57110.3111.7111.6-0.11.2
Core CPI82.71112.2114.3114.40.12

Feel Free to Comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Verified by MonsterInsights