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Inflation Below 1% to end 2012 in Canada

Friday our friends at Stats Canada published their monthly report on the Consumer Price Index and thanks to moderating gasoline prices inflation fell back to about 0.8% year over year (effectively for 2013 then), which should cement interest rates at the current settings for a while. This inflation rate (year over year) matches the one in November so the rate of increase seems to be stuck below 1.0% which is good for all consumers.

Inflation in Canada for past little while
CPI for the Past Little While From Stats Canada

That graph really shows some wacky jumps in the index, but remember it is all well under 4.0% too, so it really isn’t that bad.

The one paragraph that does worry me in the report states:

Food prices rose 1.5% on a year-over-year basis in December following a 1.7% increase in November. Consumers paid 2.2% more for food purchased from restaurants and 4.4% more for meat. In contrast, prices declined 5.8% for fresh vegetables.

Which says that to feed ourselves is costing much more than inflation these days, we lovers of meat are not happy, however the great news is that the price of fresh vegetables has dropped (although I haven’t really noticed it much at the store). Healthy food dropping in price is a good thing. Vegetarians must be quite chuffed by this news.

A graphic I don’t usually show, is quite good for understanding where prices are increasing the most, so I include this for the sake of completeness:

By component price increase (year over year)

Bank of Canada’s core index

Remember the Bank of Canada measures their CPI a little differently but it is still quite moderate at 1.1% to quote Stats Canada:

The Bank of Canada’s core index rose 1.1% in the 12 months to December, following a 1.2% advance in November.

On a monthly basis, the seasonally adjusted core index increased 0.1% in December after registering no change in November.

The Big Table

To end this quick report I include one of the large tables from Stats Canada outlining price increase by group in the actual index, read all the tables too, they have a lot of good information in there:

Table 1 Consumer Price Index and major components, Canada Not seasonally adjusted

  Relative import December 2011 November 2012 December 2012 Nov to Dec 2012 Dec 2011 to Dec 2012
  % (2002=100) % change
All-items Consumer Price Index (CPI) 100.002 120.2 121.9 121.2 -0.6 0.8
Food 15.99 129.3 131.4 131.2 -0.2 1.5
Shelter 27.49 126.8 127.5 127.5 0.0 0.6
Household operations, furnishings and equipment 11.55 111.8 113.7 113.2 -0.4 1.3
Clothing and footwear 5.31 89.1 92.5 89.2 -3.6 0.1
Transportation 20.60 125.2 127.3 125.8 -1.2 0.5
Health and personal care 4.95 118.1 118.7 118.6 -0.1 0.4
Recreation, education and reading 11.20 104.1 106.1 105.3 -0.8 1.2
Alcoholic beverages and tobacco products 2.91 135.8 138.3 138.3 0.0 1.8
Special aggregates            
Core CPI3 82.15 118.2 120.2 119.5 -0.6 1.1
All-items CPI excluding energy 89.92 117.5 119.3 118.7 -0.5 1.0
Energy4 10.08 152.7 153.8 151.9 -1.2 -0.5
Gasoline 5.80 170.0 175.9 171.7 -2.4 1.0
All-items CPI excluding food and energy 73.93 115.0 116.7 116.0 -0.6 0.9
Goods 47.80 112.6 113.8 112.6 -1.1 0.0
Services 52.20 127.7 129.9 129.7 -0.2 1.6
1. 2009 CPI basket weights at April 2011 prices, Canada, effective May 2011. Detailed weights are available under the Documentation section of survey 2301 (
2.Figures may not add to 100% as a result of rounding.
3.The Bank of Canada’s core index excludes eight of the Consumer Price Index’s most volatile components (fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuels; gasoline; inter-city transportation; and tobacco products and smokers’ supplies) as well as the effects of changes in indirect taxes on the remaining components. For additional information on the core CPI, please consult the Bank of Canada website (
4.The special aggregate “Energy” includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles.

Feel Free to Comment

  1. Interesting that food is in line with alcohol. Usually during tough times vices like cigarettes/alcohol get a spike. In recessions is it common for Canadians to over eat chicken? 😉

    It’s good to hear Canada has inflation under control, maybe by the end of 2013 savers will get rewarded with deflation!

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