CPI Down a Little

in Bank of Canada, Bank Rates, Inflation, Stats Canada

Inflation Drops a Little in August

Our amigos over in Stats Canada published the latest CPI numbers yesterday and the rate is slowing a little, but not by much, dropping 0.1% year over year in August.

Instead of it being a tax helping raise the average, this month it seems our old friend Energy took a hand in helping keep the index rising at 1.7% year over year.

Overall, energy prices rose 5.0% between August 2009 and August 2010, following a 7.9% increase during the 12-month period to July. Excluding energy, the Consumer Price Index (CPI) was up 1.4% in August.

Within the energy price index, prices for electricity rose 7.7% in August compared with the same month a year earlier.

Higher consumer prices were also recorded in August for homeowner’s replacement costs (+5.5%), passenger vehicle insurance premiums (+5.1%) and food purchased from restaurants (+2.5%).

CPI Numbers Without Energy

CPI Numbers without Energy for the Past Little While

More importantly the Bank of Canada’s core index advanced 1.6% in the 12 months to August, matching the rate of growth recorded in July, which might mean the bank will rethink any need for inflation fighting in the near future (we can hope).

The Really Big Table

As a service, here is the really big table from our friends at Stats Canada, as you can see that Energy easily outstrips all other sections of the CPI, but Health continues to rise above inflation as well. That is going to be an interesting part of the index to watch for a good long time.

Table 1 Consumer Price Index and major components, Canada

Consumer Price Index and major components, Canada
Relative importance1 August 2009 July 2010 August 2010 July to August 2010 August 2009 to August 2010
Not seasonally adjusted
(2002=100) % change
All-items 100.002 114.7 116.8 116.7 -0.1 1.7
Food 17.04 121.5 123.7 123.5 -0.2 1.6
Shelter 26.62 121.1 124.3 124.0 -0.2 2.4
Household operations, furnishings and equipment 11.10 107.0 109.2 109.0 -0.2 1.9
Clothing and footwear 5.36 92.1 88.8 90.1 1.5 -2.2
Transportation 19.88 114.8 117.4 117.1 -0.3 2.0
Health and personal care 4.73 112.5 115.6 116.4 0.7 3.5
Recreation, education and reading 12.20 104.4 105.1 105.0 -0.1 0.6
Alcoholic beverages and tobacco products 3.07 131.4 134.5 134.4 -0.1 2.3
Special aggregates
Core CPI3 82.71 113.8 115.5 115.6 0.1 1.6
All-items excluding energy 90.62 113.3 115.0 114.9 -0.1 1.4
Energy 9.38 132.6 139.8 139.2 -0.4 5.0
Gasoline 4.92 144.7 147.8 147.4 -0.3 1.9
All-items excluding food and energy 73.57 111.5 113.0 113.0 0.0 1.3
Goods 48.78 107.8 109.1 109.1 0.0 1.2
Services 51.22 121.6 124.5 124.3 -0.2 2.2
2005 CPI basket weights at April 2007 prices, Canada, effective May 2007. Detailed weights are available under the Documentation section of survey 2301 (www.statcan.gc.ca/imdb-bmdi/index-eng.htm).
Figures may not add to 100% as a result of rounding.
The measure of the core Consumer Price Index (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, please consult the Bank of Canada website (www.bankofcanada.ca/en/inflation/index.htm).

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