Here we go again folks, the Consumer Price Index as reported by Stats Canada for August 2011 shows that Inflation is bouncing back up and the CPI (year over year) is back above %3 with it sitting at 3.1% (for the past 12 months). Surprisingly, the usual culprit wasn’t the catalyst for this month’s 0.4% (month-over-month) jump (i.e., it wasn’t Energy/Gas directly).
The 0.4 percentage point difference between the year-over-year increases posted in August and July was mainly the result of price increases for the purchase of passenger vehicles, electricity, homeowners’ home and mortgage insurance, telephone services and jewellery.
Jewellery? Really? Wow, that has a high impact on spending?
If you do read closer, you do see that Energy prices (year over year) are actually up 13.4% which is actually a huge jump, so they really are the biggest upward pressure on the CPI (not sure why Jewellery is so darn important).
The wild swings for Gasoline prices seem to be the major culprit these days, but the trickle down effect of these prices cause things like Food prices to jump as well.
Bank of Canada’s core index
The Bank of Canada’s core index rose 1.9% in the 12 months to August, following a 1.6% gain in July. The higher increase in August was primarily a result of a rise in prices for passenger vehicle insurance premiums, food purchased from restaurants as well as bakery and cereal products.
Really? Wow, to see that big a difference between what the Bank of Canada and the published numbers are (38% difference), always makes me scratch my head. I guess the good news is that this Inflation rate is within the Bank’s parameters, so fewer reasons to raise interest rates?
The Big Table
Want to look a little closer at where the price jumps really were, have a look at this table it will help you see where your buying power is dropping the quickest.
Consumer Price Index and major components, Canada Not seasonally adjusted
| Relative importance ¹ | August 2010 | July 2011 | August 2011 | July to August 2011 | August 2010 to August 2011 | |
|---|---|---|---|---|---|---|
| % | (2002=100) | % change | ||||
| All-items CPI | 100.00 ² | 116.7 | 120.0 | 120.3 | 0.3 | 3.1 |
| Food | 15.99 | 123.5 | 129.0 | 128.9 | -0.1 | 4.4 |
| Shelter | 27.49 | 124.0 | 125.9 | 126.2 | 0.2 | 1.8 |
| Household operations, furnishings and equipment | 11.55 | 109.0 | 110.7 | 111.2 | 0.5 | 2.0 |
| Clothing and footwear | 5.31 | 90.1 | 89.7 | 90.6 | 1.0 | 0.6 |
| Transportation | 20.60 | 117.1 | 125.0 | 125.3 | 0.2 | 7.0 |
| Health and personal care | 4.95 | 116.4 | 116.7 | 117.5 | 0.7 | 0.9 |
| Recreation, education and reading | 11.20 | 105.0 | 106.8 | 106.4 | -0.4 | 1.3 |
| Alcoholic beverages and tobacco products | 2.91 | 134.4 | 136.1 | 136.1 | 0.0 | 1.3 |
| Special aggregates | ||||||
| Core CPI ³ | 82.15 | 115.6 | 117.3 | 117.8 | 0.4 | 1.9 |
| All-items CPI excluding energy | 89.92 | 114.9 | 117.0 | 117.2 | 0.2 | 2.0 |
| Energy | 10.08 | 139.2 | 157.9 | 157.9 | 0.0 | 13.4 |
| Gasoline | 5.80 | 147.4 | 182.5 | 181.0 | -0.8 | 22.8 |
| All-items CPI excluding food and energy | 73.93 | 113.0 | 114.3 | 114.7 | 0.3 | 1.5 |
| Goods | 47.80 | 109.1 | 112.9 | 113.2 | 0.3 | 3.8 |
| Services | 52.20 | 124.3 | 127.1 | 127.3 | 0.2 | 2.4 |
Inflation and Consumer Price Index 2011
- Inflation Slows a Little to End 2011. Consumers paid 4.4% more for food in the 12 months to December, down from 4.8% the month before. The year-over-year change for food purchased from stores eased in December to a 5.0% gain from 5.7% in November.
- CPI still Hot for November 2011 in Canada. Consumer prices rose 2.9% in the 12 months to November, matching the October increase. While the 12-month change in gasoline prices continued to ease, year-over-year food prices remained high.
- CPI Slows for October 2011 in Canada. Energy prices rose 11.7% in the 12 months to October, down from a 12.5% gain in September. On a year-over-year basis, gasoline prices rose 18.2%, after advancing 22.7% in September. Prices for fuel oil increased 22.1% in October, following a 27.4% rise the month before. Electricity prices rose, while natural gas prices continued to decline.
- Inflation on the Rise in September in Canada (2011). Energy prices rose 12.5% in the 12 months to September, after a 13.4% increase in August. On a year-over-year basis, gasoline prices rose 22.7%, after gaining 22.8% in August. Fuel oil prices rose 27.4%, while natural gas prices fell 4.7%.
- CPI on the Rebound August 2011 in Canada. The 0.4 percentage point difference between the year-over-year increases posted in August and July mainly resulted from price increases for passenger vehicles, electricity, homeowners’ home and mortgage insurance, telephone services, and jewellery.
- Inflation Slows in July 2011 but Still High(ish). Energy prices rose 12.9% in the 12 months to July, after a 15.7% increase in June. On a year-over-year basis, gasoline prices rose 23.5%, compared with the 28.5% gain in June. In contrast, natural gas prices fell. Food prices rose 4.3% in the 12 months to July, matching June’s increase. Excluding food and energy, the Consumer Price Index (CPI) increased 1.2% in the 12 months to July, after advancing 1.4% in June.
- CPI Slows in Canada (June 2011). Prices for food purchased from stores rose 4.8% in the 12 months to June, up from 4.2% in May. Energy prices rose 15.7% in the 12 months to June, after increasing 16.6% in May. On a year-over-year basis, gasoline prices rose 28.5%, slightly less than the 29.5% gain in May. Fuel oil and electricity prices also rose, while natural gas prices fell 4.6%.
- Yikes: CPI hits 3.7% Gas to Blame for May 2011. Energy prices rose 16.6% in the 12 months to May, after a 17.1% increase in April. Gasoline prices rose 29.5%, the largest increase since September 2005, when prices rose after Hurricane Katrina. The latest year-over-year increase follows a 26.4% gain in April, and leaves the gasoline index just below the peak level reached in July 2008. Fuel oil prices were also higher (+28.2%), and electricity prices rose (+0.9%), while natural gas fell 5.3%.
