Photo: Ryan Remiorz, The canadian Press
The price at the pump has plunged, while the rate of car trips has decreased.
The habits of canadian consumers have changed so much during the pandemic COVID-19 that the measure of inflation, Statistics Canada has become less reliable, suggests an analysis released Monday.
The federal agency had previously indicated that annual inflation had fallen by 0.2 percentage point in April, and then declined by 0.4 of a percentage point in may, so that containment measures have curbed household spending.
But a new analysis just to demonstrate that consumers were spending more for items that have less importance in the calculation of the index of consumer prices (CPI), which tracks inflation. In addition, they spent less for some categories weigh more heavily in the balance, as the essence.
In the framework of his “exploratory analysis of the effects of changing consumption patterns on the indices of consumer prices,” Statistics Canada noted that the annual inflation would have been zero in April and would have been 0.1 percentage point in may.
The document states that if the habits can ” prevail for some time “, the changes must be sustained for there to be an impact ” on the annual inflation.
The research paper made public on Monday, has been carried out in partnership with the Bank of Canada, which aims to keep inflation at 2 %. The target is expressed as a function of the rate of increase over 12 months in the CPI. The central bank had warned that the economic storm triggered by the health crisis, and low interest rates would have an effect on inflation, which was below its target.
Expenditures for gasoline have declined, given that the price at the pump had broken and that the frequency of car trips has decreased. Canadians are less traveled, while they spent more on grocery shopping.
Statistics Canada must disclose, in the next week, inflation data in June.
The Bank of Canada had reported in April that inflation would be virtually nil in the second quarter. Due to the level of uncertainty caused by the pandemic, the central bank had indicated that the portrait was less clear for the rest of the things.
On Wednesday, the central bank will publish its outlook updates.