Inflation Still Under 2 Pct (for now)

in Bank of Canada, Inflation

The Consumer Price Index for the period ending September 2017 is 1.6% (year over year). The Bank of Canada’s goal is to keep the inflation rate under 2.0%. The Bank’s own measurements have inflation running at either 1.5%, or 1.8% depending on which definition you choose. Both are below 2.0% as well.

Let’s slice the onion and see where the CPI upswing came from.  The Year over year the high/lowlights are:

Main upward contributors:

  • Gasoline (+14.1%)
  • Homeowners’ replacement cost (+4.0%)
  • Food purchased from restaurants (+2.7%)
  • Travel tours (+7.3%)
  • Air transportation (+6.4%)

Main downward contributors:

  • Electricity (-8.6%)
  • Women’s clothing (-4.6%)
  • Telephone services (-3.1%)
  • Furniture (-3.3%)
  • Men’s clothing (-2.7%)

Given Gasoline is fluctuating again, what does the CPI look like without it? Have a look:
CPI With and Without Gasoline
Homeowners’ replacement cost is another add-on to home ownership to keep in mind as well. The drop in Electricity was expected with Ontario’s rebate program, but what will happen when the program ends? It is a rebate, not a price cut.

By overall category is also quite interesting:
Inflation by category for September 2017

2017 Inflation Discussion

Reports on inflation in 2017 so far.


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