October 25, 2011

Carrick: Analyzing the latest food and energy inflation statistics

In Canada and the United States, the price of food and energy has been rising more quickly than other sub-categories of the consumer price index. However, the Canadian government is opening up the agricultural sector through moves such as the dismantling of the Canadian Wheat Board.

Meanwhile, new discoveries of shale gas and the move to build the Keystone XL pipeline to transport crude from the oilsands are two examples of major changes in the energy sector.

For more analysis of the agricultural and energy sectors, please see Behind-the-scenes action within the food and energy CPI sub-categories by Alex Carrick, chief economist, Reed Construction Data Canada.

In his latest blog post, Carrick analyzes the latest statistics from the Consumer Price Index both in Canada and the United States.

In the agricultural sector, there is a trend towards dispensing with cartels. The food sub-index of the CPI was up 4.3 per cent year-over-year in September.

The year-over-year increase in energy prices in Canada was 12.5 per cent. In the U.S., it was 19.3 per cent. But new finds in oil and gas, such as shale deposits, are altering the outlook. Although prices in Asia are higher than in north America, energy firms such as Royal Dutch Shell, Apache and Encana are working on liquefied natural gas export facilities in Kitimat, British Columbia.

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