The good news is that on Wednesday last week the Bank of Canada kept their key over night rate at 1.0% for now, however on Friday Stats Canada confirmed what we all already knew, inflation continues at its torrid pace in June, specifically:
The Consumer Price Index (CPI) rose 2.4% in the 12 months to June, following a 2.3% increase in May.
Remember that over 2.0% starts the Bank of Canada taking notice of Inflation. The graph for Inflation does not look very good, as you can see:
Quite the spike going on, what caused this jump? A very good graph in the report shows where it is hurting the most.
Note tobacco and booze is up big time, just in time for the summer.
Bank of Canada’s core index
Remember that the Bank of Canada is the worry point, in that they might raise interest rates to “cool down” inflation. I guess the good news here is that the Bank of Canada’s measures seem to say our inflation isn’t bad (yet).
The Bank of Canada’s core index rose 1.8% in the 12 months to June, after increasing 1.7% in May.
The seasonally adjusted core index rose 0.2% on a monthly basis in June, matching the increase in May.
Note this helpful graphic from the Bank of Canada and how they notice inflation.
The Big Table
For those who aren’t sure, let me show you where the big increases are in a big table!
Consumer Price Index and major components, Canada – Not seasonally adjusted
|Rel import1||June 2013||May 2014||June 2014||May to June 2014||June 2013 to June 2014|
|All-items Consumer Price Index (CPI)||100.002||123.0||125.8||125.9||0.1||2.4|
|Household operations, furnishings and equipment||12.66||114.2||115.8||116.4||0.5||1.9|
|Clothing and footwear||5.82||91.2||94.5||92.7||-1.9||1.6|
|Health and personal care||4.93||118.4||119.2||119.0||-0.2||0.5|
|Recreation, education and reading||10.96||106.6||107.8||108.2||0.4||1.5|
|Alcoholic beverages and tobacco products||2.79||140.9||146.2||146.7||0.3||4.1|
|All-items CPI excluding energy||91.44||119.9||122.1||122.2||0.1||1.9|
|All-items CPI excluding food and energy||74.85||117.2||119.1||119.1||0.0||1.6|