Here we go again folks, the Consumer Price Index as reported by Stats Canada for August 2011 shows that Inflation is bouncing back up and the CPI (year over year) is back above %3 with it sitting at 3.1% (for the past 12 months). Surprisingly the regular culprit was not the catalyst for this past month’s 0.4% (month over month) jump (i.e. it wasn’t Energy/Gas directly).
The 0.4 percentage point difference between the year-over-year increases posted in August and July was mainly the result of price increases for the purchase of passenger vehicles, electricity, homeowners’ home and mortgage insurance, telephone services and jewellery.
Jewellery? Really? Wow, that has a high impact on spending?
If you do read closer, you do see that Energy prices (year over year) are actually up 13.4% which is actually a huge jump, so they really are the biggest upward pressure on the CPI (not sure why Jewellery is so darn important).
The wild swings for Gasoline prices seem to be the major culprit these days, but the trickle down effect of these prices cause things like Food prices to jump as well.
Bank of Canada’s core index
The Bank of Canada’s core index rose 1.9% in the 12 months to August, following a 1.6% gain in July. The higher increase in August was primarily a result of a rise in prices for passenger vehicle insurance premiums, food purchased from restaurants as well as bakery and cereal products.
Really? Wow, to see that big a difference between what the Bank of Canada and the published numbers are (38% difference), always makes me scratch my head. I guess the good news is that this Inflation rate is within the Bank’s parameters, so less reasons to raise interest rates?
The Big Table
Want to look a little closer at where the price jumps really were, have a look at this table it will help you see where your buying power is dropping the quickest.
Consumer Price Index and major components, Canada – Not seasonally adjusted
| Relative importance¹ | August 2010 | July 2011 | August 2011 | July to August 2011 | August 2010 to August 2011 | |
|---|---|---|---|---|---|---|
| % | (2002=100) | % change | ||||
| All-items CPI | 100.00² | 116.7 | 120.0 | 120.3 | 0.3 | 3.1 |
| Food | 15.99 | 123.5 | 129.0 | 128.9 | -0.1 | 4.4 |
| Shelter | 27.49 | 124.0 | 125.9 | 126.2 | 0.2 | 1.8 |
| Household operations, furnishings and equipment | 11.55 | 109.0 | 110.7 | 111.2 | 0.5 | 2.0 |
| Clothing and footwear | 5.31 | 90.1 | 89.7 | 90.6 | 1.0 | 0.6 |
| Transportation | 20.60 | 117.1 | 125.0 | 125.3 | 0.2 | 7.0 |
| Health and personal care | 4.95 | 116.4 | 116.7 | 117.5 | 0.7 | 0.9 |
| Recreation, education and reading | 11.20 | 105.0 | 106.8 | 106.4 | -0.4 | 1.3 |
| Alcoholic beverages and tobacco products | 2.91 | 134.4 | 136.1 | 136.1 | 0.0 | 1.3 |
| Special aggregates | ||||||
| Core CPI³ | 82.15 | 115.6 | 117.3 | 117.8 | 0.4 | 1.9 |
| All-items CPI excluding energy | 89.92 | 114.9 | 117.0 | 117.2 | 0.2 | 2.0 |
| Energy | 10.08 | 139.2 | 157.9 | 157.9 | 0.0 | 13.4 |
| Gasoline | 5.80 | 147.4 | 182.5 | 181.0 | -0.8 | 22.8 |
| All-items CPI excluding food and energy | 73.93 | 113.0 | 114.3 | 114.7 | 0.3 | 1.5 |
| Goods | 47.80 | 109.1 | 112.9 | 113.2 | 0.3 | 3.8 |
| Services | 52.20 | 124.3 | 127.1 | 127.3 | 0.2 | 2.4 |
