Low Flying Prices: Inflation at 1.1% for September

In October 2013, our friends at Stats Canada published their monthly Consumer Price Index report, which showed that prices continue to look like they are slowly increasing at 1.1% year over year, but again, that is also open to interpretation.

Stats Canada’s overview was simply:

Higher shelter costs led the rise in the CPI. Year-over-year price increases for food and transportation were also contributing factors. The health and personal care index was the only major component to decline in September compared with the same month a year ago.

So the “housing bubbles” continue to contribute, and the pendulum price swings of Gasoline seem to soften the blow this month (see the large table at the end for a further elaboration on that comment).

The problem with the gasoline pendulum pricing is that it is a pendulum that is not nailed down and it continues to move to a higher price (i.e. the price is never going to drop back to 80 cents a liter (at least not until alternate fuels come seriously into play)), so while sometimes it is way up and sometimes it is way down it still moves higher over time.

Prices continue to go up, there is no escaping this and if your “investments” aren’t growing at least this much you are falling behind (yes I am stating the blindingly obvious yet again, but sometimes the obvious is important to repeat, just like sometimes the obvious is important to repeat).

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Bank of Canada's core index

Remember that the central bank has its own CPI measurement and that is what they use to decide whether to raise interest rates, or make monetary policies more conservative (or restrictive). So far we are safe (again):

The Bank of Canada's core index rose 1.3% in the 12 months to September 2013, matching the increase in August.

The Big Table

As usual I urge you to go over to the Stats Canada Web Site and look at the data yourself (and don't just believe bloggers or the Talking heads on TV), the data is quite interesting:

Table 3 Consumer Price Index and major components Seasonally adjusted¹

	July 2013	August 2013	September 2013	July to August 2013	August to September 2013
	(2002=100)			% change
All-items Consumer Price Index (CPI)	122.9	123.0	123.2	0.1	0.2
Food	132.1	132.6	132.7	0.4	0.1
Shelter	128.8	128.8	129.0	0.0	0.2
Household operations, furnishings and equipment	114.6	114.4	114.4	-0.2	0.0
Clothing and footwear	92.9	93.0	91.9	0.1	-1.2
Transportation	129.4	129.6	130.0	0.2	0.3
Health and personal care	118.2	118.2	118.4	0.0	0.2
Recreation, education and reading	106.3	106.6	106.3	0.3	-0.3
Alcoholic beverages and tobacco products	140.5	140.4	140.9	-0.1	0.4
Special aggregates
Core CPI2	121.2	121.2	121.3	0.0	0.1
All-items CPI excluding food and energy3	117.3	117.3	117.4	0.0	0.1

1.A seasonally adjusted series is one from which seasonal movements have been eliminated. Each month, the previous month's seasonally adjusted index is subject to revision. On an annual basis, the seasonally adjusted values for the last three years are revised with the January data release. Users employing CPI data for indexation purposes are advised to use the unadjusted indexes. For more information on the availability and uses of seasonally adjusted CPI data, please see the Definitions, data sources and methods section of survey 2301.

2.The Bank of Canada's core index excludes eight of the CPI's most volatile components (fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuels; gasoline; inter-city transportation; and tobacco products and smokers' supplies) as well as the effects of changes in indirect taxes on the remaining components. For additional information on the core CPI, please consult the Bank of Canada website ).

3.The special aggregate "Energy" includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles.

 
Inflation 2013

What was Inflation like in 2013?

• Inflation Below 1% to end 2012 in Canada
• Christmas CPI Data Ho Ho Ho
• Low Flying Prices: Inflation at 1.1% for September
• The Price is Right? Consumer Price Index up 1.1% for August in Canada
• CPI Up to 1.2 % in June in Canada 2013
• Inflation at 0.4 % For April in Canada
• Inflation Back to 1.0% for March in Canada
• Inflation Up a Little in February in Canada
• CPI at 0.5% for January in Canada, Wow that is Low!