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Oh boy! My predictions of doom and gloom last month again were unfounded as the year over year inflation rate eased to 2.2% in April. Just goes to show that the premise that Economists have predicted 12 out of the last 2 recessions, holds for Financial Bloggers like me too!

The claim is gasoline only went up 2.6% in April, but it has been going up by so much these days, the cumulative effect is going to be felt soon everywhere (is my prediction).

As long as the price index can stay low, there is less pressure on interest rates to go up, and the Debtor Nations (aka North America)are protected for yet another month, from themselves, but how long will this last?

Another scary thing is that Food and Shelter are both up over 3% year over year, and to me these are two very important costs to watch. Shelter for me isn't as important, since I already have it, but food, with as many kids as I have, that one is really important!

Consumer Price Index and major components
(1992=100)
	Relative importance1	April 2007	March 2007	April 2006	March to April 2007	April 2006 to April 2007
		Unadjusted
					% change
All-items	100.002	132.8	132.3	130.0	0.4	2.2
Food	16.89	135.0	135.0	130.0	0.0	3.8
Shelter	26.75	132.2	131.3	127.7	0.7	3.5
Household operations and furnishings	10.58	117.5	117.5	116.4	0.0	0.9
Clothing and footwear	5.37	102.8	102.5	100.8	0.3	2.0
Transportation	19.79	159.4	158.2	158.5	0.8	0.6
Health and personal care	4.52	123.4	122.9	122.3	0.4	0.9
Recreation, education and reading	11.96	127.5	127.4	126.6	0.1	0.7
Alcoholic beverages and tobacco products	4.13	153.9	153.4	150.7	0.3	2.1
All-items (1986=100)		170.1
Purchasing power of the consumer dollar expressed in cents, compared to 1992		75.3	75.6	76.9
Special aggregates
Goods	48.84	126.4	125.9	125.1	0.4	1.0
Services	51.16	139.9	139.3	135.5	0.4	3.2
All-items excluding food and energy	74.27	127.7	127.4	125.2	0.2	2.0
Energy	8.84	180.3	176.1	180.1	2.4	0.1
Core CPI3	82.75	131.2	131.0	128.0	0.2	2.5
1. 2001 CPI basket weights at June 2004 prices, Canada: Effective July 2004. Detailed weights are available under the Documentation section of survey 2301 at (http://www.statcan.ca/english/sdds/index.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 smokers' supplies. For additional information on Core CPI, please consult the Bank of Canada website (http://www.bankofcanada.ca/en/inflation/index.htm).

Useful other Links

• Inflation at 2.3% for March

• Inflation at 1.2% in Canada

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