The Consumer Price Index continues its merry dance upwards, making the Bank of Canada’s life a little more interesting every month. On Friday our Amigos at Stats Canada published the Consumer Price Index Numbers for September 2011, and they showed more upward trending in the Index.
What were the major culprits causing the 3.2% rate increase (year over year) this past month (as opposed to the 3.1% increase last month)? You have three guesses and the first two don’t count:
Energy prices advanced 12.5% during the 12 months to September, following a 13.4% increase in August. On a year-over-year basis, gasoline prices rose 22.7%, after gaining 22.8% in August. Prices for fuel oil rose 27.4% while prices for natural gas fell 4.7%.
Qu’elle surprise energy leads the way again, I would never have guessed.
This is starting to make things very interesting in Canada in terms of when the interest rates will start to increase. More interestingly people actually say things like:
Excluding food and energy, the Consumer Price Index (CPI) increased 1.9% in the 12 months to September, following a 1.5% advance the month before. Larger year-over-year price increases in September were observed for the purchase of passenger vehicles, clothing and passenger vehicle insurance premiums.
Why would you take energy and food out of the discussion? Those are really the two major ones that you really can’t ignore? Good to see CPI is running under 2% without these two dastardly index members, but the number is a little synthetic.
Bank of Canada’s core index
The Bank of Canada’s core index advanced 2.2% in the 12 months to September, the largest year-over-year gain since December 2008. The increase follows a 1.9% rise in August. Larger year-over-year price increases in September were observed for the purchase of passenger vehicles, clothing and passenger vehicle insurance premiums.
This means the numbers are around what the B of C wants, but still getting on the high side of things. Will this cause an interest rate increase, maybe not yet, but it is going to be hard to ignore these numbers if they continue on.
The Big Table
Want to know how each area added to the index? Don’t worry, Stats Canada has all kinds of tables to look at:
Consumer Price Index and major components, Canada – Not seasonally adjusted
| Relative importance¹ | Sept 2010 | August 2011 | Sept 2011 | August to Sept 2011 |
Sept 2010 to Sept 2011 |
|
|---|---|---|---|---|---|---|
| % | (2002=100) | % change | ||||
| All-items Consumer Price Index (CPI) | 100.00² | 116.9 | 120.3 | 120.6 | 0.2 | 3.2 |
| Food | 15.99 | 122.9 | 128.9 | 128.2 | -0.5 | 4.3 |
| Shelter | 27.49 | 123.9 | 126.2 | 125.7 | -0.4 | 1.5 |
| Household operations, furnishings and equipment | 11.55 | 109.4 | 111.2 | 111.6 | 0.4 | 2.0 |
| Clothing and footwear | 5.31 | 92.8 | 90.6 | 95.0 | 4.9 | 2.4 |
| Transportation | 20.60 | 117.1 | 125.3 | 126.3 | 0.8 | 7.9 |
| Health and personal care | 4.95 | 116.1 | 117.5 | 117.5 | 0.0 | 1.2 |
| Recreation, education and reading | 11.20 | 105.6 | 106.4 | 106.9 | 0.5 | 1.2 |
| Alcoholic beverages and tobacco products | 2.91 | 134.4 | 136.1 | 135.9 | -0.1 | 1.1 |
| Special aggregates | ||||||
| Core CPI³ | 82.15 | 115.8 | 117.8 | 118.4 | 0.5 | 2.2 |
| All-items CPI excluding energy | 89.92 | 115.1 | 117.2 | 117.8 | 0.5 | 2.3 |
| Energy | 10.08 | 138.7 | 157.9 | 156.0 | -1.2 | 12.5 |
| Gasoline | 5.80 | 147.0 | 181.0 | 180.4 | -0.3 | 22.7 |
| All-items CPI excluding food and energy | 73.93 | 113.4 | 114.7 | 115.5 | 0.7 | 1.9 |
| Goods | 47.80 | 109.2 | 113.2 | 113.5 | 0.3 | 3.9 |
| Services | 52.20 | 124.5 | 127.3 | 127.8 | 0.4 | 2.7 |
