Inflation Up For Now, but How Long?
After a joyful end of week where the stock market went back in the tank, but Gas prices dropped before the Victoria Day long weekend (that is really weird), we also got some news from Stats Canada about the Consumer Price Index for April 2010.
Consumer Prices rose 1.8% year over year in April (compared to March’s smaller 1.4% increase year over year). This again brings back the evil specter of Interest Rate increases by the bank of Canada very soon, but then again, who knows?
Again energy prices seem to be pushing the index up, but now that Oil prices are again dropping (as are Gasoline prices), what will that mean for the summer?
Overall, energy prices rose 9.8% between April 2009 and April 2010, following a 5.8% increase during the 12-month period to March. Excluding energy, the Consumer Price Index (CPI) rose 1.1% compared with a 1.0% increase in March.Gasoline prices exerted the strongest upward pressure on the all-items CPI for the sixth consecutive month. In April, prices at the pump were 16.3% higher than they were in April 2009. This follows a 17.2% rise in the 12 months to March.
So simple arithmetic suggests that dropping gas and energy prices might cause next month’s numbers to be better? We shall see, is the guess there.
The other problem is that Gas increases cause ripple effect price increases, which may be felt later in the year, as well.
The Really Big Table
Yes, I love to include this table (which you can find at Stats Canada as well), to show just where all this increase seems to go (I have boldened the biggest increases on the table):
| Relative import |
April 2009 | March 2010 | April 2010 | March to April 2010 |
April 2009 to April 2010 |
|
|---|---|---|---|---|---|---|
| Unadjusted | ||||||
| (2002=100) | % change | |||||
| All-items | 100.00 | 113.9 | 115.6 | 116.0 | 0.3 | 1.8 |
| Food | 17.04 | 121.6 | 123.1 | 122.8 | -0.2 | 1.0 |
| Shelter | 26.62 | 121.4 | 121.7 | 122.4 | 0.6 | 0.8 |
| Household operations, furnishings and equipment | 11.10 | 107.3 | 108.3 | 108.5 | 0.2 | 1.1 |
| Clothing and footwear | 5.36 | 95.1 | 93.6 | 94.1 | 0.5 | -1.1 |
| Transportation | 19.88 | 110.5 | 117.1 | 117.4 | 0.3 | 6.2 |
| Health and personal care | 4.73 | 111.1 | 113.5 | 114.8 | 1.1 | 3.3 |
| Recreation, education and reading | 12.20 | 102.4 | 102.5 | 102.9 | 0.4 | 0.5 |
| Alcoholic beverages and tobacco products | 3.07 | 129.7 | 131.5 | 131.8 | 0.2 | 1.6 |
| Special aggregates | ||||||
| Core CPI3 | 82.71 | 113.2 | 115.0 | 115.3 | 0.3 | 1.9 |
| All-items excluding energy | 90.62 | 113.1 | 114.1 | 114.4 | 0.3 | 1.1 |
| Energy | 9.38 | 123.9 | 134.5 | 136.0 | 1.1 | 9.8 |
| Gasoline | 4.92 | 127.1 | 147.6 | 147.8 | 0.1 | 16.3 |
| All-items excluding food and energy | 73.57 | 111.2 | 112.1 | 112.5 | 0.4 | 1.2 |
| Goods | 48.78 | 107.0 | 109.0 | 109.4 | 0.4 | 2.2 |
| Services | 51.22 | 120.7 | 122.2 | 122.6 | 0.3 | 1.6 |
Mentioned in Carnival of Personal Finance
Money Relationship hosted The Carnival of Personal Finance #258 : Cities at Night, which has some amazing pictures of major cities of the world at night, where they mention my story about Registered Disability Savings Plans.
Good stuff. Crazy to see that 16.3% increase in gasoline prices year over year. On a slightly related note, do you know if there is much of a lag in the gasoline vs oil prices. I guess you got some dropping gas prices, but ours (here in Victoria BC) went up 7 or 8 cents a couple weeks ago, and have not dropped yet. Can we expect some relief, or are they just gonna continue to gouge us all summer?
I don’t have a Gas crystal ball, but I am confident the Oil Industry will find another crisis to rachet prices back up soon (but only in my opinion)