Consumer Prices

The Consumer Price Index data for January  in both Canada and the US were released yesterday, no real surprises as energy prices fell precipitously in the first month of 2015.

you will need to click on this chart to enlarge it.

• Interestingly, without gas prices included, Canadian CPI has been fairly steady to slightly higher.
• In fact 7 of the 8 major categories posted gains in January.
• Some of this is attributable to the weaker $C and the increasing cost of imported goods.
• The BOC monitors "core" inflation, which strips out the more volatile food and energy sectors, which is actually above the BOC's 2% target.
• But we do all need to eat, drive and stay warm!

Similar (but different) story south of the 49th!

more here: http://www.bls.gov/news.release/cpi.nr0.htm

The all items index declined 0.1 percent over the last 12 months, the first negative 12-month change since the period ending October 2009. 

The energy index fell 19.6 percent over the span, with the gasoline index down 35.4 percent. 

The index for all items less food and energy increased 1.6 percent.  

The stronger $US keeping import prices down and the "core" CPI well below the Fed's targets.


Important takeaways for the "data dependant":


part of both central bank's mandates are to keep inflation within certain target ranges:
with core inflation above 2%, the BOC likely will keep the Bank Rate steady for the time being.
with US core inflation below 2%, the Fed can continue to be "patient" in beginning the normalization of interest rates.

 The views expressed are those of the author, Scott Tomenson, a Raymond James Financial Advisor, and not necessarily those of Raymond James Ltd. It is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor's circumstances and risk tolerance before making any investment decision. The information contained in this blog was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. Raymond James Ltd. is a member of the Canadian Investor Protection Fund.