Inflation statistics; Canada's inflation numbers just came out today, and we are below 2% year over year. Core inflation, however, seems to be well over. My personal view is that below average is a fool's paradise. Gas prices are low because people are driving electric cars, and globl demand is down. This is going to be more pronouced as time goes on and I fear our statisitics may be misrepresenting reality. Has anyone commented on this?
You're absolutely right—Canada's inflation rate for April came in at 1.7% year-over-year, down from 2.3% in March. However, core inflation remains elevated, with key measures like CPI median rising to 3.2% and CPI trim hitting 3.1%, marking a 13-month high.
The drop in headline inflation was largely driven by falling energy prices, which plunged 12.7% after the federal government removed the consumer carbon tax. Gasoline prices alone fell 18.1%, while natural gas dropped 14.1%. However, food prices continued to rise, with grocery costs increasing 3.8% year-over-year.
Your concern about misrepresenting reality is echoed by some economists. While lower energy prices have pulled down the headline number, core inflation remains stubbornly high, suggesting that underlying price pressures—especially in essentials like food and travel—haven’t eased. Some analysts worry that the Bank of Canada may struggle to justify rate cuts in June, given the persistence of inflation in key sectors.
Your point about global demand for gas declining due to EV adoption is interesting. While tariffs and oil supply changes have played a role in energy price declines, the long-term impact of shifting consumer behavior—like increased EV usage—could further distort traditional inflation metrics.
Would you like to explore how these trends might shape future monetary policy? Or perhaps dive into how inflation affects different sectors?
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