Friday Stats Canada put out some interesting numbers for their Consumer Price Index report for May (and the year ending in May). It was a big drop (well a drop in the rate of increase, so it’s kind of confusing), but it only rose 1.2% (year over year ending in May) and that is due to gas price increases subsiding:
Consumer prices rose 1.2% in the 12 months to May, following a 2.0% increase in April. This 0.8 percentage point difference was mostly attributable to declines for gasoline prices. Decreases in clothing prices as well as slower price gains for the purchase of passenger vehicles were also factors.
Canada continues to be at the mercy of gasoline prices, which is also why the Canadian economy is so strong (an interesting dichotomy). The Canadian dollar is strong thanks to Canada being resource-rich (and the tar sands in particular), yet gas prices continue to yo-yo, causing inflationary jumps and drops. Maybe it’s time Canada wasn’t so reliant on Gas (I jest, since I am not some granola-crunching Green Party member)? A more interesting paragraph followed this initial statement from Statistics Canada:
The energy index fell 1.6% in the 12 months to May, its first year-over-year decline since October 2009. Natural gas prices (-16.6%) continued to post declines. Gasoline prices decreased 2.3%, after 22 months of year-over-year increases. In contrast, electricity prices continued to rise.
So electricity prices are going up, and everything else is kind of going down? Given what I am seeing here in Ottawa, I agree with this statement, and think electricity prices are a little out of control (here in Ontario at least).
Quite the roller coaster ride, but will it continue, or is this a short dip leading back to the rising prices of the past 2 years? A more interesting graphic is comparing the CPI for the last little while with and without Energy included in it:
So things are a little more “normal” without energy; however, energy does affect prices no matter how you slice it, thanks to its price increases rippling through other prices (like produce and anything that has to be delivered using trucks and such).
Bank of Canada’s core index
The Bank of Canada’s core index rose 1.8% in the 12 months to May, following a 2.1% gain in April. Price gains for electricity, food purchased from restaurants and meat continued to be main contributors to the year-over-year increase in the core index.
On a monthly basis, the seasonally adjusted core index was unchanged in May, after rising 0.4% the previous month.
Interesting, so the Bank of Canada think inflation is still functioning inside of its “norms”. For this month a reprieve for Bank Rates, but what will this summer bring in terms of gasoline prices?
The Big Table
As per usual I include one of the Big Tables from Stats Canada, showing more detail on all the data:
Consumer Price Index and major components, Canada Not seasonally adjusted
| Relative import | May 2011 | April 2012 | May 2012 | April to May 2012 |
May 2011 to May 2012 |
|
|---|---|---|---|---|---|---|
| % | (2002=100) | % change | ||||
| All-items Consumer Price Index (CPI) | 100.00 | 120.6 | 122.2 | 122.1 | -0.1 | 1.2 |
| Food | 15.99 | 127.7 | 130.1 | 130.9 | 0.6 | 2.5 |
| Shelter | 27.49 | 125.2 | 126.6 | 126.7 | 0.1 | 1.2 |
| Household operations, furnishings and equipment | 11.55 | 110.4 | 112.6 | 112.8 | 0.2 | 2.2 |
| Clothing and footwear | 5.31 | 93.7 | 95.3 | 93.4 | -2.0 | -0.3 |
| Transportation | 20.60 | 128.9 | 131.3 | 129.9 | -1.1 | 0.8 |
| Health and personal care | 4.95 | 117.2 | 118.9 | 118.8 | -0.1 | 1.4 |
| Recreation, education and reading | 11.20 | 106.1 | 105.4 | 106.7 | 1.2 | 0.6 |
| Alcoholic beverages and tobacco products | 2.91 | 135.7 | 137.7 | 137.7 | 0.0 | 1.5 |
| Special aggregates | ||||||
| Core CPI | 82.15 | 117.8 | 119.7 | 119.9 | 0.2 | 1.8 |
| All-items CPI excluding energy | 89.92 | 117.3 | 119.1 | 119.3 | 0.2 | 1.7 |
| Energy | 10.08 | 160.2 | 161.0 | 157.7 | -2.0 | -1.6 |
| Gasoline | 5.80 | 190.5 | 192.9 | 186.1 | -3.5 | -2.3 |
| All-items CPI excluding food and energy | 73.93 | 115.0 | 116.6 | 116.7 | 0.1 | 1.5 |
| Goods | 47.80 | 114.4 | 115.3 | 114.7 | -0.5 | 0.3 |
| Services | 52.20 | 126.7 | 129.1 | 129.5 | 0.3 | 2.2 |
Inflation for 2012 Stories
- Canada Inflation Steady at 1.2% in October 2012: CPI and Core Index Breakdown . Canada’s inflation stayed steady at 1.2% in October 2012. Energy price moderation helped ease the CPI, while food and shelter costs rose slightly.
- Inflation Remains Steady for October 2012 in Canada . October 2012 inflation numbers: CPI remains at 1.2%. Is this good for consumers and the economy? Understand how inflation affects prices and the overall economy.
- Consumer prices rose 1.2% in the 12 months to September 2012, matching the increase in August 2012. Higher energy prices, particularly for gasoline and electricity, led the advance in the Consumer Price Index (CPI) for September. This was tempered by lower year-over-year price increases for the purchase of passenger vehicles and for food purchased from stores.
- Slowing Inflation some More for August 2012 in Canada. Canada’s inflation slowed to 1.2% in August 2012, with modest price increases for gas, food, and shelter. Core inflation held at 1.6%, offering relief to consumers.
- Inflation Lower in July in Canada 2012 . Canada’s inflation in July 2012 dropped to 1.3%, driven by lower gas and clothing prices, while food costs continued to rise. A look back at what drove CPI shifts.
- CPI Rate Up a Little for June 2012 in Canada. Canada’s CPI rose 1.5% in June 2012, driven by higher vehicle and electricity prices. Core inflation reached 2.0%, nearing the Bank of Canada’s rate-hike threshold.
- CPI Dropped in May 2012, Wow! Yes, for once the prices dropped. Gas prices were the main reason for the drop in price increases. Keep that in mind: prices were still going up, just not that fast.
- April’s CPI Child is Still Inflating (in Canada). Energy prices increased 1.1% in the 12 months to April 2012, following a 5.1% rise in March. The slower increase in April 2012 was largely due to smaller price gains in gasoline and electricity, as well as price declines in natural gas (-13.9%).
- CPI Sneaking Back up for January 2009. Food prices rose 4.2% on a year-over-year basis in January following a 4.4% increase in December. In January, consumers paid 4.9% more for food purchased from stores and 2.8% more for food purchased from restaurants compared with January 2011.
