CPI for October at 2.4%

Gas, mortgage interest and home repair and replacement costs were the major reasons for the price increase. If Gas has stayed steady, the real inflation would have been 1.9% for the same period (year over year), but thanks to continually soaring gas prices, Inflation is running at 2.4% year over year.

Will this cause a lowering of interest rates? With the rate continuing to stay within the area that the bank of Canada wants it to be, it will not cause a rate increase, however, with the swooning Loonie, that interest rate drop might not happen either.

Sin areas continue to have healthy price increases as well (smoking and alcohol), but Energy is easily the biggest jump in the Stats Can “basket of goods” that they use to calculate the Consumer price index.

Consumer Price Index and major components

(2002=100)

Relative importance

October 2007

September 2007

October 2006

September to October 2007

October 2006 to October 2007

Unadjusted

% change

All-items

100.00

111.6

111.9

109.0

-0.3

2.4

Food

17.04

110.7

110.9

109.2

-0.2

1.4

Shelter

26.62

118.7

117.8

114.1

0.8

4.0

Household operations and furnishings

11.10

103.4

103.7

102.2

-0.3

1.2

Clothing and footwear

5.36

97.1

97.4

97.7

-0.3

-0.6

Transportation

19.88

115.2

116.9

111.7

-1.5

3.1

Health and personal care

4.73

107.5

107.6

106.1

-0.1

1.3

Recreation, education and reading

12.20

102.7

103.4

100.9

-0.7

1.8

Alcoholic beverages and tobacco products

3.07

126.3

126.6

122.2

-0.2

3.4

All-items (1992=100)

132.9

133.2

129.7

-0.2

2.5

Special aggregates

Goods

48.78

107.1

107.8

105.6

-0.6

1.4

Services

51.22

116.1

115.9

112.2

0.2

3.5

All-items excluding food and energy

73.57

109.6

109.7

107.5

-0.1

2.0

Energy

9.38

134.5

136.6

123.8

-1.5

8.6

Core CPI

82.71

110.3

110.5

108.4

-0.2

1.8

1.	2005 CPI basket weights at April 2007 prices, Canada – Effective May 2007. Detailed weights are available under the Documentation section of survey 2301 (www.statcan.gc.ca/english/sdds/index.htm).
2.	Figures may not add up to 100% due to rounding.
3.	The measure of Core Consumer Price Index (CPI) excludes from the All-items CPI the effect of changes in indirect taxes and eight of the most volatile components identified by the Bank of Canada: fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuel; gasoline; inter-city transportation; and tobacco products and smokers’ supplies. For additional information on Core CPI, please consult the Bank of Canada website (www.bankofcanada.ca/en/inflation/index.htm).

Tomorrow

Back to the quarterly personal finance status report, how to do it

CPI for October at 2.4%