Low Gas Prices puts Inflation at 2.0% In November

in Inflation, Stats Canada

Our friends at Stats Canada told us what we kind of already knew, that lower gas prices in November lowered inflation to 2.0% (year over year).

If we look at the graph of Inflation for the past little while, it is really a saw-tooth of ups and downs (but luckily all of this happening around 2.0% as the median):

Inflation Canada

Inflation for the past 5 years

How wild has gas prices been lately? Luckily Stats Canada also included this helpful graph to show us just how crazy things are right now.

Gas Price Index

Gas Price Index

Mid-year we are setting new records and now we are well below $1 a litre (in Ontario at least). Does this mean things are just “peachy keen”? Not, really, that inflation is at 2.0% with gas dropping that much suggests other essentials are going up at a higher rate.

To quote our friends at Stats Canada:

The shelter index rose 2.3% in the 12 months to November, following a 2.8% gain in October. Natural gas prices increased 14.7% on a year-over-year basis in November, after recording a 20.1% rise the previous month. As well, electricity prices were up 3.6% year over year in November, following a 5.6% increase in October.

Food prices advanced 3.1% on a year-over-year basis in November. Prices for food purchased from stores were up 3.3% in the 12 months to November, led by a 12.2% rise in meat prices. Food purchased from restaurants cost 2.5% more in November compared with the same month in 2013.

Holy cow! Meat prices are up over 12%?!? Meat did seem more expensive in my visits to the grocery stores.

Bank of Canada’s core index

Remember that the Bank of Canada measures CPI in a bit different way, and that is what they use in terms of figuring out whether to slow the economy down. Luckily we are still in the “sweet spot” for the Bank of Canada, so we are less likely to see interest rates going up (for this reason at least).

The Bank of Canada’s core index rose 2.1% in the 12 months to November, after increasing 2.3% in October.

The seasonally adjusted core index posted no change on a monthly basis in November, following a 0.2% increase in October.

What is the CPI?

This month I won’t include any of the big tables, as we have already discussed the major category increases, but Stats Canada has published on their YouTube channel a helpful video explaining, just what is the CPI, have a look.

Inflation over 2014 so far

Reports on inflation from:  January , February , March , April , May , JuneAugust , September , October

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