Stats Canada published their monthly report on the Consumer Price Index for the 12 month period ending in December 2010, and the CPI jumped to 2.4% (year over year) from 2.0% (year over year) in the previous report. Our old friend gasoline prices seems to be the major culprit (which is interesting given gas prices haven’t seen a significant jump and with the Canadian Dollar at parity with the US dollar, what might be driving these prices up?). If gasoline is the fuel driving the Inflation monster, can we find a hybrid version and use less of it (rhetorical and silly commentary, please do not take seriously).
To quote our friends at Stats Canada:
Between December 2009 and December 2010, gasoline prices increased 13.0%, after advancing 7.2% in the 12 months to November. Excluding gasoline, the Consumer Price Index (CPI) rose 1.8% in December, identical to the increase recorded in November.
In addition to paying more for gasoline, consumers paid 6.2% more for electricity and 9.2% more for natural gas in December. Overall, energy prices rose 10.5% during the 12 months to December.
As the following graphs show Gasoline and Energy are the big issues in our basket of goods, this year.
As you can see without Gasoline our CPI is quite low, but with it, we are getting into areas that might worry the bank of Canada.
We can also see that Gas prices have moderated (i.e. they are not having violent swings up and down), however, now the trend seems to be continually upwards (no more drops in prices). This is another bad thing.
Bank of Canada Core Index
This one is important because it is where the central bank looks to figure out whether they should be increasing our interest rates to control inflation, however it only advanced 1.5% (year over year) which is only a 0.1% jump from last month’s measurement, so no reason to panic (yet).
Loose money looks like it will continue for a while longer.
The Big Table
I simply love this table, just because it says so much, and has so much information about what we are buying and how the prices are going up in those areas:
|Relative import1||Dec 2009||Nov 2010||Dec 2010||Nov to Dec 2010||Dec 2009 to Dec 2010|
|Not seasonally adjusted|
|Household operations, furnishings and equipment||11.10||107.5||109.5||109.3||-0.2||1.7|
|Clothing and footwear||5.36||90.6||92.1||88.8||-3.6||-2.0|
|Health and personal care||4.73||113.2||116.1||115.8||-0.3||2.3|
|Recreation, education and reading||12.20||102.8||104.3||103.9||-0.4||1.1|
|Alcoholic beverages and tobacco products||3.07||131.2||134.6||134.6||0.0||2.6|
|All-items excluding energy||90.62||113.5||115.6||115.4||-0.2||1.7|
|All-items excluding food and energy||73.57||111.7||113.9||113.5||-0.4||1.6|