CPI Down Sort of Again
Stats Canada announced on Thursday that the Overall CPI for the year ending August 2009 effectively dropped by 0.8% (the July year to year drop was a whopping 0.9%). Why? A few reasons but the cost of Gasoline is the major component of the overall CPI that caused this drop in prices.
Gas Still Cheaper than Last Year at this Time
It’s hard to remember but last year at this time the price at the pump per liter for gasoline was still around $1.20 (in Ottawa at least) and now our prices are around 90 cents a liter, and this is a big dampening force for any large price increases in other parts of the CPI
Hard to remember that Gasoline is so much cheaper, but it is not too bad. Interesting to note that the graph also shows that our price right now is still higher than it was last December (so this “deflation” due to Gasoline may not continue on much longer).
Interest Rates Should Stay Lower
If you look at the Bank of Canada’s core index it is up 1.6% year over year, which is still well below the Bank of Canada’s goals for Inflation, which should mean that this will not be a reason for interest rates to creep up in the near future. Lower interest rates will allow for folks to pay down debt, or get their debt loads lower, which is a good thing (anyone seeing this as a reason to get farther into debt, please slap your left wrist with a metal ruler (like the Nuns used to)).
Big Culprit?
Given the monstrous differences in Gasoline prices, what could possibly be going up in price now? Food prices again are up over 4.0% year over year which is a bad thing for large households, as well as house and Personal Care areas were up a large amount (2.9%) as well.
My personal peeve of Alcohol and Beverages were up a whopping 3.1%, but no one dares complain about that!
| Relative importance2 | August 2008 | August 2009 | July 2008 to July 2009 | August 2008 to August 2009 | |
|---|---|---|---|---|---|
| Unadjusted | |||||
| % change | |||||
| All-items | 100.003 | 115.6 | 114.7 | -0.9 | -0.8 |
| Food | 17.04 | 116.8 | 121.5 | 5.0 | 4.0 |
| Shelter | 26.62 | 123.8 | 121.1 | -2.0 | -2.2 |
| Household operations, furnishings and equipment | 11.10 | 104.4 | 107.0 | 2.6 | 2.5 |
| Clothing and footwear | 5.36 | 93.7 | 92.1 | -2.1 | -1.7 |
| Transportation | 19.88 | 123.1 | 114.8 | -9.1 | -6.7 |
| Health and personal care | 4.73 | 109.3 | 112.5 | 3.7 | 2.9 |
| Recreation, education and reading | 12.20 | 103.5 | 104.4 | 1.1 | 0.9 |
| Alcoholic beverages and tobacco products | 3.07 | 127.5 | 131.4 | 3.1 | 3.1 |
| All-items (1992=100) | 137.6 | 136.6 | -0.9 | -0.7 | |
| Special aggregates | |||||
| Goods | 48.78 | 111.5 | 107.8 | -3.9 | -3.3 |
| Services | 51.22 | 119.6 | 121.6 | 1.8 | 1.7 |
| All-items excluding food and energy | 73.57 | 110.5 | 111.5 | 1.0 | 0.9 |
| Energy | 9.38 | 164.0 | 132.6 | -23.4 | -19.1 |
| Core CPI4 | 82.71 | 112.0 | 113.8 | 1.8 | 1.6 |
Random Thoughts Return Next Week
Given how little I wrote this week, I felt putting out a “best of” posting for Friday would show just how slack a lifestyle I lead, so Random Thoughts will return next week.
Inflation in 2009
- Inflation Edges Up in December 2009 for the first time in a while
- How do you spell INFLATION? In November, evidently, it looked like it might start again
- Consumer Price Index is Trending Up Again in October of 2009
- CPI: How Many Negatives Make it Deflation? a good question for September 2009
- CPI Down Again (kind of) for August of 2009. Is that really deflation?
- Deflation again! CPI Down for July (sort of) really deflation? Not really.
- Inflation down 0.3% for June most of this in June 2009 is caused by gasoline pricing silliness.
- Consumer Price Index for May 2009: Nudges Up but overall it keeps looking like not much
- CPI For April 2009 at 0.4% Wow , calm down big fella it is not that good news
- Consumer Price Index Down a Little for March 2009 which is a good thing, don’t you think?
- Inflation Jumps for February 2009, did it really?
