The Consumer Price Index continues its merry dance upwards, making the Bank of Canada’s life a little more interesting every month. On Friday, our Amigos at Stats Canada published the Consumer Price Index Numbers for September 2011, and they showed more upward trending in the Index.
What were the major culprits causing the 3.2% rate increase (year over year) this past month (as opposed to the 3.1% increase last month)? You have three guesses and the first two don’t count:
Energy prices advanced 12.5% during the 12 months to September, following a 13.4% increase in August. On a year-over-year basis, gasoline prices rose 22.7%, after gaining 22.8% in August. Prices for fuel oil rose 27.4% while prices for natural gas fell 4.7%.
Qu’elle surprise energy leads the way again, I would never have guessed.
This is starting to make things very interesting in Canada when it comes to when interest rates will start to increase. More interestingly, people actually say things like:
Excluding food and energy, the Consumer Price Index (CPI) increased 1.9% in the 12 months to September, following a 1.5% advance the month before. Larger year-over-year price increases in September were observed for the purchase of passenger vehicles, clothing and passenger vehicle insurance premiums.
Why would you take energy and food out of the discussion? Those are really the two major ones that you really can’t ignore? Good to see CPI is running under 2% without these two dastardly index members, but the number is a little synthetic.
Bank of Canada’s core index
The Bank of Canada’s core index advanced 2.2% in the 12 months to September, the largest year-over-year gain since December 2008. The increase follows a 1.9% rise in August. Larger year-over-year price increases in September were observed for the purchase of passenger vehicles, clothing and passenger vehicle insurance premiums.
This means the numbers are around what the B of C wants, but still getting on the high side of things. Will this cause an interest rate increase, maybe not yet, but it is going to be hard to ignore these numbers if they continue on.
The Big Table
Want to know how each area added to the index? Don’t worry, Stats Canada has all kinds of tables to look at:
Consumer Price Index and major components, Canada Not seasonally adjusted
| Relative importance ¹ | Sept 2010 | August 2011 | Sept 2011 | August to Sept 2011 |
Sept 2010 to Sept 2011 |
|
|---|---|---|---|---|---|---|
| % | (2002=100) | % change | ||||
| All-items Consumer Price Index (CPI) | 100.00 ² | 116.9 | 120.3 | 120.6 | 0.2 | 3.2 |
| Food | 15.99 | 122.9 | 128.9 | 128.2 | -0.5 | 4.3 |
| Shelter | 27.49 | 123.9 | 126.2 | 125.7 | -0.4 | 1.5 |
| Household operations, furnishings and equipment | 11.55 | 109.4 | 111.2 | 111.6 | 0.4 | 2.0 |
| Clothing and footwear | 5.31 | 92.8 | 90.6 | 95.0 | 4.9 | 2.4 |
| Transportation | 20.60 | 117.1 | 125.3 | 126.3 | 0.8 | 7.9 |
| Health and personal care | 4.95 | 116.1 | 117.5 | 117.5 | 0.0 | 1.2 |
| Recreation, education and reading | 11.20 | 105.6 | 106.4 | 106.9 | 0.5 | 1.2 |
| Alcoholic beverages and tobacco products | 2.91 | 134.4 | 136.1 | 135.9 | -0.1 | 1.1 |
| Special aggregates | ||||||
| Core CPI ³ | 82.15 | 115.8 | 117.8 | 118.4 | 0.5 | 2.2 |
| All-items CPI excluding energy | 89.92 | 115.1 | 117.2 | 117.8 | 0.5 | 2.3 |
| Energy | 10.08 | 138.7 | 157.9 | 156.0 | -1.2 | 12.5 |
| Gasoline | 5.80 | 147.0 | 181.0 | 180.4 | -0.3 | 22.7 |
| All-items CPI excluding food and energy | 73.93 | 113.4 | 114.7 | 115.5 | 0.7 | 1.9 |
| Goods | 47.80 | 109.2 | 113.2 | 113.5 | 0.3 | 3.9 |
| Services | 52.20 | 124.5 | 127.3 | 127.8 | 0.4 | 2.7 |
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%.
