Inflation is almost non-existent, no matter what consumers think

“Inflation — like the data shows and the Bank of Canada keeps reminding us — is nowhere close to being a problem that would require jacking up interest rates. That’s not likely to happen for another year at the earliest — not until the Canadian economy is chugging steadily along and inflation is holding around the central bank’s ideal 2% target.”

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Reblogged from Financial Post, Gordon Isfeld

OTTAWA — We’ve seen a long string of mild monthly inflation reports from Statistics Canada for the past year or more, and the likelihood is there will be more of the same in 2014 and beyond.

Sure, food and gasoline costs can jump back and forth, and alcohol and tobacco prices are consistently near the top of the leader board. But the reality is that Canadian consumers shouldn’t have too much to complain about, inflation-wise, at the moment.

But still they do.

Perceptions can be skewed by big-ticket items, like houses and the appliances needed to fill them. A look at the cost of daily or weekly needs provides a different picture, one of mostly weak increases and equally narrow growth declines.

Inflation — like the data shows and the Bank of Canada keeps reminding us — is nowhere close to being a problem that would require jacking up interest rates. That’s not likely to happen for another year at the earliest — not until the Canadian economy is chugging steadily along and inflation is holding around the central bank’s ideal 2% target.

For now, the consumer price index is struggling to stay around the 1% mark.

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Read More … 597 more words

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One response to “Inflation is almost non-existent, no matter what consumers think

  1. Pingback: What is Inflation and How is It Measured? | JPCooper & Fellows·

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