Friday, our friends at Stats Canada published their monthly report on the Consumer Price Index. 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.
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:
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 |
Inflation for 2012 Stories
- Inflation Below 1% to end 2012 in Canada. Food prices rose 1.5% year over year in December, after a 1.7% increase in November. Consumers paid 2.2% more for restaurant food and 4.4% more for meat. In contrast, prices declined 5.8% for fresh vegetables.
- CPI Slowing for November 2012 in Canada. Consumer prices rose 0.8% in the 12 months to November, following a 1.2% gain in October. The November increase was the smallest year-over-year gain in the Consumer Price Index (CPI) since October 2009.
- 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. Moderating energy prices helped ease CPI, while food and shelter costs rose slightly.
- 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 2012. 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.
- 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.
Inflation 2013
What was Inflation like in 2013?
- Inflation Below 1% to end 2012 in Canada
- Christmas CPI Data Ho Ho Ho
- Low Flying Prices: Inflation at 1.1% for September
- The Price is Right? Consumer Price Index up 1.1% for August in Canada
- CPI Up to 1.2 % in June in Canada 2013
- Inflation at 0.4 % For April in Canada
- Inflation Back to 1.0% for March in Canada
- Inflation Up a Little in February in Canada
- CPI at 0.5% for January in Canada, Wow that is Low!
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!
Already had a dose of that a year ago, if Gas prices drop a little further it may happen yet!