This post revisits Canada’s October 2012 inflation numbers as reported by Statistics Canada. While the data is historical, it still provides important lessons about energy prices. It shows how consumer demand and policy decisions influence the cost of living. For anyone analyzing long-term economic trends or looking to compare inflationary periods, this post remains a useful reference.
Our friends at Stats Canada published on Friday the October inflation numbers and the CPI continues to remain at 1.2% year over year (same as for August and September). Prices are increasing by the same amount year over year. This is good for consumers. But is it good for our economy? I remember vaguely from my Econ courses at U of Waterloo. They taught that a higher inflation might be a little better for things. It would signify a more robust economy, but I may not be remembering that correctly.
To quote our friends at Stats Canada:
Consumer prices rose 1.2% in the 12 months to October, matching the increases in August and September. Energy prices rose at a slower year-over-year rate in October compared with September, while air transportation, food purchased from stores and property taxes posted larger price gains.
Energy brings the index down a little? That is good, given how much it has been giving upwards pressure to the index for the past little while.
That graphic is always helpful. It shows how volatile energy prices are. It also illustrates their effects on the overall Consumer Price Index.
It is also important to see the index increase over time. We need to understand that we sometimes get hung up by the RATE the CPI is increasing. In fact, we should remember how much the CPI has gone up over time.
Bank of Canada’s core index
As usual the Bank of Canada has their own measure of things, and here it is:
The Bank of Canada’s core index rose 1.3% in the 12 months to October, matching the increase in September.
On a monthly basis, the seasonally adjusted core index increased 0.1% in October, after posting no change in September.
The Big Table
Always fun to look at price increases by category too, to see where we are paying more:
Consumer Price Index and major components, Canada Not seasonally adjusted
| Relative import1 | October 2011 |
September 2012 |
October 2012 |
Sept to Oct2012 | Oct 2011 to Oct 2012 | |
|---|---|---|---|---|---|---|
| % | (2002=100) | % change | ||||
| All-items Consumer Price Index (CPI) | 100.002 | 120.8 | 122.0 | 122.2 | 0.2 | 1.2 |
| Food | 15.99 | 128.0 | 130.3 | 130.5 | 0.2 | 2.0 |
| Shelter | 27.49 | 126.5 | 127.2 | 127.6 | 0.3 | 0.9 |
| Household operations, furnishings and equipment | 11.55 | 111.9 | 113.2 | 113.5 | 0.3 | 1.4 |
| Clothing and footwear | 5.31 | 96.1 | 93.3 | 94.7 | 1.5 | -1.5 |
| Transportation | 20.60 | 126.5 | 128.3 | 128.6 | 0.2 | 1.7 |
| Health and personal care | 4.95 | 117.4 | 118.5 | 118.5 | 0.0 | 0.9 |
| Recreation, education and reading | 11.20 | 106.0 | 107.7 | 106.6 | -1.0 | 0.6 |
| Alcoholic beverages and tobacco products | 2.91 | 135.8 | 137.7 | 137.8 | 0.1 | 1.5 |
| Special aggregates | ||||||
| Core CPI3 | 82.15 | 118.7 | 119.9 | 120.2 | 0.3 | 1.3 |
| All-items CPI excluding energy | 89.92 | 117.9 | 118.9 | 119.2 | 0.3 | 1.1 |
| Energy4 | 10.08 | 156.9 | 160.6 | 159.5 | -0.7 | 1.7 |
| Gasoline | 5.80 | 179.4 | 188.8 | 186.6 | -1.2 | 4.0 |
| All-items CPI excluding food and energy | 73.93 | 115.6 | 116.4 | 116.7 | 0.3 | 1.0 |
| Goods | 47.80 | 113.9 | 114.2 | 114.5 | 0.3 | 0.5 |
| Services | 52.20 | 127.7 | 129.8 | 129.8 | 0.0 | 1.6 |
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 the impact of inflation on prices and the overall economy.
- 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.
