Statistics Canada analysis suggests small hit to inflation from pandemic

Statistics Canada analysis suggests small hit to inflation from pandemic
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OTTAWA — Statistics Canada says Canadians’ buying patterns changed so much during the COVID-19 pandemic that its measure of consumer inflation went a little wobbly.

The agency previously reported that year-over-year inflation declined by 0.2 per cent in April, then took a further drop of 0.4 per cent in May as lockdowns put a damper on consumer spending.

But a look under the headline figures showed consumers were spending more on items that don’t weigh as much in the consumer price index, which tracks inflation.

And they were spending less on things that weigh more in the calculation, such as gasoline.

In a numbers experiment to better reflect pandemic spending, Statistics Canada found the annualized inflation figures for April and May would have been 0.0 and -0.1 per cent.

The research paper made public today was aided by data from the Bank of Canada, which targets an annual inflation rate of two per cent as measured by Statistics Canada’s consumer price index.

This report by The Canadian Press was first published July 13, 2020.

The Canadian Press

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