rates
ONE TRIP TO THE STORE PROVES SOME THINGS COST MORE In BC, the prices of things we’re still buying have increased; the prices of those we’re not have not.
While aggregate measures of consumer price changes do indeed tell a def lationary tale, trends in the prices of specific products and services inform a different narrative. For example, while the prices of gasoline (we’re not driving as much), public transportation (we’re not riding the bus), rented accommodation (available listings are on the rise), and clothing (how many dusty suit jackets are in your closet?) have all fallen compared to a year ago, that of food, owned accommodation, and home entertainment equipment has risen.
This has brought attention to the reality that the consumer price index, which the Bank of Canada uses to measure inf lation, is somewhat rigid in its structure and does not always ref lect true spending patterns. Interestingly, this may have implications for how the Bank views both inf lation and its policy interest rate in the months and years ahead as it refreshes its monetary policy mandate with the federal government in 2021.
MOST PRICES FALL YES, MOST NOT ALL
7.3%
NATURAL GAS TRAVEL SERVICES HEALTH & PERSONAL CARE TOBACCO SMOKER’S SUPPLIES
3.0%
2.0%
1.7%
1.3% 1.3%
CULTURAL RECREATIONAL SERVICES HOUSEHOLD FURNISHINGS EQUIP WATER FOOD OWNED ACCOMMODATION HOME ENTERTAINMENT & SERVICES RECREATIONAL CANNABIS
0.5% 0.5% 0.5%
0.4%
0.0%
-0.2% -0.2%
ACCESSORIES, JEWELLERY ALCOHOLIC BEVERAGES ELECTRICITY PRIVATE TRANSPORTATION FOOTWEAR PUBLIC TRANSPORTATION CLOTHING GASOLINE FUEL OIL & OTHER FUELS RENTED ACCOMMODATION
-0.9%
-1.3%
-2.0%
-2.4% -2.4%
-7.3%
-9.5%
-14.5% -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8%
SOURCE: STATISTICS CANADA DATA: AUG AUG CHANGE IN THE CONSUMER PRICE INDEX BY CATEGORY, BC
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