Canada’s inflation rate decelerated to 3.4 per cent in the year up to May, Statistics Canada said Tuesday, led by sharply lower gasoline prices. But beneath the headline slowdown in consumer prices, many facets of the cost of living are still increasing at an eye-watering pace. Grocery prices went up at an almost nine per cent pace.
Bullshit they literally changed the formula
Changing the formula isn’t a problem, it changes all the time (and SHOULD change all the time). In my opinion the problem is the choice of headline from CBC. Even the article acknowledges the headline inflation rate is being influenced downwards by volatile items, and that economists as well as the BoC don’t really care what the headline rate is. All eyes are still on the underlying “warm” parts of more consistent categories.
I agree that the basket of goods should change, but it’s also weird that they’ve been changing it every year that they’ve been worried about runaway inflation.
It normally changes every few years. Not every year for the last 3.
Basket of goods changes when the goods people are buying changes.
Basket of goods might have included lobster when lobster was a cheap source of protein, but it sure as hell isn’t going to include lobster today.
To me it makes perfect sense that they are more granular during times when volatility is up and inflation is a concern. Otherwise everyone would be (rightfully) complaining that they are using outdated models when inflation needs to be gotten under control.
Besides, the new weighting is public. It didn’t change all that much. I’m not going to run the numbers but the napkin math says 1) it wouldnt significantly change the headline rate and 2) it wouldnt change what we take away: it’s artificially lowered by volatile items like gasoline, and underlying consistent categories are still too hot for the BoC. So while it’s true that the headline rate is “bullshit”, it’s not because they changed the weighting.
These comments are always here, but they’re such nonsense. Any change in the formula only changes how certain items are weighted and can have very little effect of the number.
These comments need to go away.
Or you can tell us exactly how the formula changed since the last report, and how the new weight blend would make a significant difference, providing an actual number with past months formula.
Or you can just ignore my comment, and post this again next report. Ya, who am I kidding…
For reference here is the new basket weights of the CPI. Updated with the release of the May 2023 data. And here is the HCFE data that they used to update the weightings.
This. Also it’s not like inflation “cooling” negates the price increase we have already had.
No one said is did.
Inflation means the rate at which prices increase. Lowering inflation does not lower prices and never has.