Deflation at an End?
Last month for the first time in 5 months inflation has appeared to improve; this was the longest duration of deflation in Canadian history since 1953. A positive increase to 0.1% occurred in the year-to-year inflation rates which was up from the -0.9% Canadians had in September. No matter how small one-tenth of a per cent inflation seems to be, questions about the future still emerge.
Is this elevated or reduced and what does it all signify?
Such simple information about inflation can sometimes disclose less than no information at all. In October prices were 0.1% lower than the previous month when comparing month-to-month inflation amounts. So the question begs to be investigated on whether the figures are going up or dropping. Answers can be obtained by taking a closer look at the price index.
In October, observing at the 8 major price index elements such as shelter and clothing, 6 of them saw a an increase. Oil along with other energy items showed a massive shrinkage when examined next to the prices last year. A declines in oil prices were seen last October after the summer peak, but at current prices these are around $80. If you exclude other volatile energy-related components, inflation rose from 1.5% to 1.8%, seizing more money from our wallets for most consumer goods. Comparing inflation rates across the Canadian provinces, with a rise from -1.1% to 0.2%, Ontario saw the largest rise.
For a more complete look at inflation and how the future trend in Canada looks, we have produced a more in depth article on our main website - Inflation Is Back.