Canadian Consumer Price Index August2009

Date: September 17, 2009 Canadian Consumer Price Index (CPI) Year-Over-Year Per Cent Change Canadian Consumer Price Index, August 2009 Results 4% 3% Source: Statistics Canada 2% 1% Link to Release: 0% CPI Annual Per Cent Change http://www.statcan.gc.ca/daily-quotidien/090917/dq090917a-eng.htm -1% Core CPI (Bank of Canada) Annual Per Cent Change -2% Summary: The Consumer Price Index (CPI) is used to measure the rate at which prices for consumer goods and services are rising on an annual basis. In Source: Statistics Canada August, the Consumer Price Index (CPI) “All Items” measure fell 0.8 per cent year-over-year nationwide, and 1.2 per cent in the province of Ontario. The dominant factor in this decline was a 19.1 per cent drop in Energy Prices, Canadian Gasoline Price (CPI Component) Year-Over-Year Per Cent Change including a 21.2 per cent drop in gasoline prices. With these factors removed, 40% the less volatile Bank of Canada Core CPI increased by 1.6 per cent. 30% Analysis: Given that the August result was in line with expectations at the Bank 20% 10% Of Canada. The Bank has projected that declines in the “All Items” CPI will 0% trough in the third quarter of 2009 before increasing slowly toward the Bank’s -10% two per cent target in mid-2011. With CPI inflation projected to be below the -20% Bank’s target growth rate over the next year, the Bank will keep the overnight -30% lending rate at its record low until mid-2010. The expectation is that the Bank -40% will start to raise interest rates in the second half of 2010 to ensure that inflation does not overshoot the two per cent target. It will also be important to watch the Source: Statistics Canada value of the Canadian dollar vis-à-vis the US dollar. The risk is that a high Canadian dollar could act as a drag on exports, slow economic recovery and keep inflation below the Bank’s target. This could alter the Bank of Canada’s Written By: plans regarding future interest rate adjustments. Jason Mercer TREB Senior Manager of Market Analysis. jmercer@trebnet.com

Canadian Consumer Price Index August2009

by Richard Silver on Sep 18, 2009

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Canadian Consumer Price Index August2009 — Presentation Transcript