This is the Inflation Numbers from February 2010, when Inflation settled down to around 2.0% year over year for about 10 years. Nobody’s net value went up mind you because wages went up very little as well, even though there was good employment. Left as a historical reference.
Even though the Stats Canada February 2010 core CPI numbers don’t say it, the Bank of Canada’s numbers say inflation, enough to have various pundits now saying that the predicted interest rate increases may come sooner than July, this year.
If you look at the Stats Canada numbers in fact things look better than in January with the 12 month rate dropping to 1.6% as compared to the January 12-month rate which was 1.9%, so this shows a drop in the CPI, but what the Bank of Canada measures and what Stats Canada has in their basket are a little different.
The graph even looks nice, but sometimes looks can be very deceiving.
Gasoline prices exerted the most upward pressure on the all-items Consumer Price Index (CPI) for a fourth consecutive month. In February, prices at the pump were 15.3% higher than they were in February 2009. This follows a 23.9% rise in the 12 months to January.
The graph for gas prices shows a normalization of prices, but at a higher rate than last year, which is not a good thing.
Bank of Canada Core is the Problem
As mentioned, if you ask the Bank of Canada, they are not as happy about these numbers because in their index:
The Bank of Canada’s core index advanced 2.1% over the 12 months to February, following a 2.0% rise in January.February’s increase was due primarily to price increases for passenger vehicles, as well as for traveller accommodation affected by the Olympics.
This is what might cause your interest rate increases. The financial pundits are certainly jumping on the bandwagon that this will signal interest rate increases, so it will be interesting to see if the Banks maybe take the lead and increase Mortgage and short term lending rates in preparation for this eventual increase? I would certainly lock in now, but that is only my opinion.
The Big Table
| Relative importance | Feb 2009 |
Jan 2010 |
Feb2010 | Jan to Feb 2010 |
Feb 2009 to Feb 2010 |
|
|---|---|---|---|---|---|---|
| Unadjusted | ||||||
| % change | ||||||
| All-items | 100.002 | 113.8 | 115.1 | 115.6 | 0.4 | 1.6 |
| Food | 17.04 | 121.2 | 122.3 | 122.7 | 0.3 | 1.2 |
| Shelter | 26.62 | 123.2 | 121.8 | 121.8 | 0.0 | -1.1 |
| Household operations, furnishings and equipment | 11.10 | 106.4 | 107.9 | 108.3 | 0.4 | 1.8 |
| Clothing and footwear | 5.36 | 93.6 | 90.1 | 91.2 | 1.2 | -2.6 |
| Transportation | 19.88 | 110.2 | 117.2 | 116.7 | -0.4 | 5.9 |
| Health and personal care | 4.73 | 110.4 | 113.8 | 113.7 | -0.1 | 3.0 |
| Recreation, education and reading | 12.20 | 101.1 | 101.1 | 104.1 | 3.0 | 3.0 |
| Alcoholic beverages and tobacco products | 3.07 | 129.2 | 131.1 | 131.4 | 0.2 | 1.7 |
| All-items (1992=100) | 135.4 | 137.0 | 137.6 | 0.4 | 1.6 | |
| Special aggregates | ||||||
| Goods | 48.78 | 107.3 | 108.4 | 108.5 | 0.1 | 1.1 |
| Services | 51.22 | 120.2 | 121.8 | 122.6 | 0.7 | 2.0 |
| All-items excluding food and energy | 73.57 | 110.8 | 111.6 | 112.4 | 0.7 | 1.4 |
| Energy | 9.38 | 127.2 | 133.9 | 132.3 | -1.2 | 4.0 |
| Core CPI3 | 82.71 | 112.8 | 114.4 | 115.2 | 0.7 | 2.1 |
