Our friends at Stats Canada published on Friday the October inflation numbers and the CPI continues to remain at 1.2% year over year (same as for August and September). So prices are increasing by the same amount year over year, which is good for consumers, but is it good for our economy? I remember vaguely from my Econ courses at U of Waterloo that a higher inflation might be a little better for things, as it would signify a more robust economy, but I may not be remembering that correctly.
To quote our friends at Stats Canada:
Consumer prices rose 1.2% in the 12 months to October, matching the increases in August and September. Energy prices rose at a slower year-over-year rate in October compared with September, while air transportation, food purchased from stores and property taxes posted larger price gains.
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Energy brings the index down a little? That is good, given how much it has been giving upwards pressure to the index for the past little while.
Inflation with and without energy for the past little while
That graphic is always helpful as it shows how volatile energy prices are, and it's effects on the overall Consumer Price Index.
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This is the Actual Consumer Price Index increases over the past little while
It is also important to see the index increase over time, to understand that we sometimes get hung up by the RATE the CPI is increasing, when in fact we should remember how much the CPI has gone up over time.
Bank of Canada's core index
As usual the Bank of Canada has their own measure of things, and here it is:
The Bank of Canada's core index rose 1.3% in the 12 months to October, matching the increase in September.
On a monthly basis, the seasonally adjusted core index increased 0.1% in October, after posting no change in September.
The Big Table
Always fun to look at price increases by category too, to see where we are paying more:
Consumer Price Index and major components, Canada - Not seasonally adjusted
|Sept to Oct2012||Oct 2011 to Oct 2012|
|All-items Consumer Price Index (CPI)||100.002||120.8||122.0||122.2||0.2||1.2|
|Household operations, furnishings and equipment||11.55||111.9||113.2||113.5||0.3||1.4|
|Clothing and footwear||5.31||96.1||93.3||94.7||1.5||-1.5|
|Health and personal care||4.95||117.4||118.5||118.5||0.0||0.9|
|Recreation, education and reading||11.20||106.0||107.7||106.6||-1.0||0.6|
|Alcoholic beverages and tobacco products||2.91||135.8||137.7||137.8||0.1||1.5|
|All-items CPI excluding energy||89.92||117.9||118.9||119.2||0.3||1.1|
|All-items CPI excluding food and energy||73.93||115.6||116.4||116.7||0.3||1.0|
1. 2009 CPI basket weights at April 2011 prices, Canada, effective May 2011. Detailed weights are available under the Documentation section of survey 2301 (www.statcan.gc.ca/imdb-bmdi/2301-eng.htm).
2. Figures may not add to 100% as a result of rounding.
3. The Bank of Canada's core index excludes eight of the Consumer Price Index'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 (www.bankofcanada.ca/rates/indicators/key-variables/inflation-control-target/).
4. The special aggregate "Energy" includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles.