in Bank of Canada, Inflation, Stats Canada

Higher Gas Bites

Stats Canada came out with the monthly Consumer Price Index (aka CPI or Inflation) numbers for periods ending in October 2010, and Gasoline prices may be triggering a fresh round of discussions about Hyper-Inflation (again).

The year over year rate for the period ending in October 2010 is now 2.4% (up from September’s 1.9%) and most of the blame is aimed at Gasoline prices (which have been moving up steadily for the past little while). Without the sting of Gasoline, the CPI is up 2.1% which is starting to move up, and could cause upward pressure for Interest Rates.

A very telling statement from the release is:

Energy prices advanced 9.1% during the 12 months to October, following a 5.6% increase in September. In addition to rising gasoline prices, prices for electricity increased 8.1%, while natural gas prices rose 10.6%.

Given that the Ontario Government is now trying to bring the Electrical Rates down a little with a change in their Peak Usage periods, should be interesting if that helps in May, when it is finally enacted.

Bank of Canada View

The Bank of Canada’s basket of goods was up 1.8% (year over year) in October, which is starting to push into the area where the bank might start thinking about an interest rate goose given their concerns about inflationary spirals and such.

The Big Table

Want to see where your favorite purchase fits into the Inflationary growth we are having, then have a look at the big picture table found here:

Relative import1 Oct 2009 Sept 2010 Oct 2010 Sept to Oct 2010 Oct 2009 to Oct 2010 Not seasonally adjusted (2002=100) % change All-items 100.002 114.6 116.9 117.4 0.4 2.4 Food 17.04 120.1 122.9 122.7 -0.2 2.2 Shelter 26.62 121.2 123.9 124.6 0.6 2.8 Household operations, furnishings and equipment 11.10 107.9 109.4 109.3 -0.1 1.3 Clothing and footwear 5.36 95.0 92.8 94.9 2.3 -0.1 Transportation 19.88 113.4 117.1 118.6 1.3 4.6 Health and personal care 4.73 112.9 116.1 116.0 -0.1 2.7 Recreation, education and reading 12.20 104.5 105.6 105.2 -0.4 0.7 Alcoholic beverages and tobacco products 3.07 131.4 134.4 134.5 0.1 2.4 Special aggregates Core CPI3 82.71 114.2 115.8 116.3 0.4 1.8 All-items excluding energy 90.62 113.4 115.1 115.5 0.3 1.9 Energy 9.38 128.8 138.7 140.5 1.3 9.1 Gasoline 4.92 139.5 147.0 151.8 3.3 8.8 All-items excluding food and energy 73.57 112.0 113.4 113.9 0.4 1.7 Goods 48.78 107.0 109.2 109.7 0.5 2.5 Services 51.22 122.1 124.5 124.9 0.3 2.3

1. 2005 CPI bask et weights at April 2007 prices, Canada, effective May 2007. Detailed weights are available under the Documentation section of survey 2301 ( www.statcan.gc.ca/imdb-bmdi/index-eng.htm ). 2. Figures may not add to 100% due to rounding. 3. The measure of Core Consumer Price Index (CPI) excludes from the all-items CPI the effect of changes in indirect taxes and eight of the most volatile components identified by the Bank of Canada: fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuel; gasoline; inter-city transportation; and tobacco products and smok ers’ supplies. For additional information on Core CPI, consult the Bank of Canada website (www.bankofcanada.ca/en/inflation/index.htm).

Like this: Like Loading...