Inflation at the end of 2011 was under control but continued to be odd in terms of what was up and what was down. Consumer Price Index December 2011.
Year over year 2012’s Consumer Price Index ended at 2.3% according to our friends at Stats Canada. The drop from last month’s 2.9% is being attributed to gas prices moderating (i.e. not increasing as fast, and in some instances almost dropping a smidge), and car prices dropping a little.
This is not to say that Gas prices are really dropping, but that the increase compared to last year at this time doesn’t seem quite as bad. The actual rise of gas prices year over year was about 7.6% as compared to last month where the year over year where gas was effectively up 13.5%, so it looks like the gas price increase is declining (but not the price really).
Other words from Stat Canada:
Consumers paid 4.4% more for food in the 12 months to December, following a 4.8% increase the month before. The year-over-year change for food purchased from stores eased in December to a 5.0% gain from 5.7% in November.
Bouncy, bouncy graph
Even though the CPI is moderating the bad news is that prices are up in every major category on the Index. Everything ends up costing more year over year, is never a good thing to read.
Since 2002, you can see how inflation has chewed away the actual value of a Canadian Dollar, and this period has been low, what happens if inflation suddenly heats up?
Bank of Canada’ Core Index
What the Bank of Canada thinks the inflation rate runs at is even more important, because they are the only one who has a brake for the economy (i.e. Money supply rules and Interest Rates), and luckily they think it is actually a little lower than their target which is around 2.0%, using their index. This means interest rates won’t jump due to inflation for this month.
The Bank of Canada’s core index rose 1.9% in the 12 months to December, after increasing 2.1% in November. Increases were recorded for food purchased from restaurants and passenger vehicle insurance premiums, while prices for the purchase of passenger vehicles declined.
The seasonally adjusted monthly core index posted no change in December.
The BIG Table
Where were the biggest jumps in the CPI? Always check out the Stats Canada web pages for more details, but I always love publishing one of their BIG tables too.
Table 1 Consumer Price Index and major components, Canada – Not seasonally adjusted
| Relative importance¹ | Dec 2010 | Nov 2011 | Dec 2011 | Nov to Dec 2011 | Dec 2010 to Dec 2011 | |
|---|---|---|---|---|---|---|
| % | (2002=100) | % change | ||||
| All-items Consumer Price Index (CPI) | 100.00² | 117.5 | 120.9 | 120.2 | -0.6 | 2.3 |
| Food | 15.99 | 123.9 | 129.2 | 129.3 | 0.1 | 4.4 |
| Shelter | 27.49 | 124.6 | 126.3 | 126.8 | 0.4 | 1.8 |
| Household operations, furnishings and equipment | 11.55 | 109.3 | 112.1 | 111.8 | -0.3 | 2.3 |
| Clothing and footwear | 5.31 | 88.8 | 93.1 | 89.1 | -4.3 | 0.3 |
| Transportation | 20.60 | 121.2 | 127.6 | 125.2 | -1.9 | 3.3 |
| Health and personal care | 4.95 | 115.8 | 117.9 | 118.1 | 0.2 | 2.0 |
| Recreation, education and reading | 11.20 | 103.9 | 104.8 | 104.1 | -0.7 | 0.2 |
| Alcoholic beverages and tobacco products | 2.91 | 134.6 | 135.8 | 135.8 | 0.0 | 0.9 |
| Special aggregates | ||||||
| Core CPI³ | 82.15 | 116.0 | 118.8 | 118.2 | -0.5 | 1.9 |
| All-items CPI excluding energy | 89.92 | 115.4 | 118.2 | 117.5 | -0.6 | 1.8 |
| Energy4 | 10.08 | 144.0 | 154.1 | 152.7 | -0.9 | 6.0 |
| Gasoline | 5.80 | 158.0 | 175.2 | 170.0 | -3.0 | 7.6 |
| All-items CPI excluding food and energy | 73.93 | 113.5 | 115.7 | 115.0 | -0.6 | 1.3 |
| Goods | 47.80 | 110.0 | 113.8 | 112.6 | -1.1 | 2.4 |
| Services | 52.20 | 124.9 | 127.8 | 127.7 | -0.1 | 2.2 |
