the rennie landscape - Fall 2021

rates

AN UNEVEN LANDSCAPE OF PRICE SURGES Building on the commentary from the previous page on inflation, it’s pretty clear that the inflation story is a complicated one, not only because of base-year and supply-chain effects, but also because of how the individual components of the CPI are conspiring to generate the headline inflation number. For example, the most recent 3.7% overall increase in Canada’s CPI reflects energy prices (which includes gasoline) that rose by

19.7% over the past year, by far the biggest outlier among the components of the CPI. But other goods and services have seen above-average surges in prices as well, including transportation (6.6%) and shelter (4.9%). That said, not everything costs a lot more, including clothing (1.0%), household furnishings (1.1%), and food (1.7%). As with most things, the devil is in the details, and the inflation story is no different.

A MIXED SHOPPING BAG OF CONSUMER PRICE INCREASES

3.7%

ALL ITEMS

ALCOHOL, TOBACCO, MARIJUANA

1.7%

1.0%

CLOTHING

19.7%

ENERGY

1.7%

FOOD

5.0%

GOODS

HEALTH PERSONAL CARE

3.6%

1.1%

HOUSEHOLD OPS

RECREATION EDUCATION

2.9%

2.6%

SERVICES

4.9%

SHELTER

6.6%

TRANSPORTATION

0%

5%

10%

15%

20%

DATA: ANNUAL CHANGES IN CONSUMER PRICE INDEX CATEGORIES, MONTHLY, NOT SEASONALLY ADJUSTED; JULY 2021

SOURCE: STATISTICS CANADA. TABLE 18-10-0004-01

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