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.
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 |
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!