Lower Prices in January in Canada, Pull the Other Leg

Stats Canada published the Consumer Price Index a little earlier this month (this past Thursday). As I guessed, the continued oscillations of Gas prices have caused the January CPI to seem to suggest that prices only rose 1.0% year over year, which is more fun with numbers. Without gas prices included, the actual CPI is around 2.5%, and with gas prices going back up 25% this past month, look for a not-so-happy story in February.

The significant increase that impacts everyone is the 4.5% increase in Food prices, to quote Stats Canada:

Food prices advanced 4.6% on a year-over-year basis in January, the largest gain since November 2011. Prices for food purchased from stores were up 5.4% in the 12 months to January, following a 4.2% rise the previous month. Prices for both fresh fruit and fresh vegetables posted higher year-over-year increases in January than in December. Consumers paid 2.8% more for food purchased from restaurants in January compared with the same month in 2014.

Given all the cogitations of fuel prices, food prices have been steadily increasing, making it a lot harder for lower and middle-income Canadians to feed their families.

Bank of Canada’s core index

Let us hope the Bank of Canada has a more sane view of inflation.

The Bank of Canada’s core index rose 2.2% in the 12 months to January, matching the increase in December.

The seasonally adjusted core index rose 0.2% on a monthly basis in January, matching the gain in December.

Well, it is closer to the real numbers, but I suspect we will continue with our over-stimulated economy for a while longer.

Consumer Price Index, major components and special aggregates

A usual, I will include one of the big tables for you to see just how interesting all the numbers are, and you do a comparison on things.

	Relative import1	January 2014	December 2014	January 2015	Dec 2014 to Jan 2015	Jan 2014 to Jan 2015
	%	(2002=100)	% change
All-items	100.002	123.1	124.5	124.3	-0.2	1.0
Food	16.41	133.0	137.4	139.1	1.2	4.6
Shelter	26.80	130.5	133.0	133.1	0.1	2.0
Household operations, furnishings and equipment	13.14	114.7	117.8	118.0	0.2	2.9
Clothing and footwear	6.08	89.2	91.1	91.1	0.0	2.1
Transportation	19.10	129.2	124.9	122.4	-2.0	-5.3
Health and personal care	4.73	118.3	119.6	120.0	0.3	1.4
Recreation, education and reading	10.89	104.7	106.1	105.6	-0.5	0.9
Alcoholic beverages and tobacco products	2.86	140.9	149.1	149.9	0.5	6.4
Special aggregates
Bank of Canada’s core index3	85.39	121.3	123.7	124.0	0.2	2.2
All-items excluding energy	92.21	120.1	122.5	122.9	0.3	2.3
Energy4	7.79	160.2	148.7	139.5	-6.2	-12.9
Gasoline	3.84	179.5	149.9	131.3	-12.4	-26.9
All-items excluding food and energy	75.80	117.3	119.3	119.5	0.2	1.9
Goods	46.68	114.2	114.6	114.0	-0.5	-0.2
Services	53.32	131.9	134.5	134.7	0.1	2.1

1. 2013 Consumer Price Index (CPI) basket weights at December 2014 prices, Canada, effective with the January 2015 CPI.
2. Figures may not add up to 100% as a result of rounding.
3. 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 index, consult the Bank of Canada’s website.
4. The special aggregate “energy” includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and accessories for recreational vehicles.

Source(s):

CANSIM tables 326-0020 and 326-0031.