Canadian Inflation (April 2021)
Posted by Ron Neal on Wednesday, May 19th, 2021 at 6:08pm.
Canadian Inflation (April 2021) - May 19, 2021
Canadian inflation, as measured by the Consumer Price Index (CPI), rose to a ten-year high of 3.4% year-over-year in April, up from 2.2% in March. Much of the increase in inflation was the result of base-year effects as prices posted a steep decline during April of last year during the first few months of the pandemic-induced shutdown. For example, gasoline prices were 62.5% higher in April 2021 than in April 2020. On a seasonally adjusted month-over-month basis, the CPI was up 0.6% in April. In BC, consumer prices were up 0.2% month-over-month and up 3% compared to April 2020.
While inflation is currently running higher than the Bank of Canada's 2 percent target, much of the increase looks to be temporary and should fade as base-year effects become less significant in coming months. Measures of core inflation, which strip out more volatile prices, are also up slightly. The Bank of Canada's three preferred measures of core inflation was trending at 2.1% or 0.2 points above inflation in March. How inflation evolves over the next 3 to 6 months will be very important for the stance of monetary policy over the next year. If higher inflation is not just a temporary phenomenon but is being driven by an over-stimulated economy then we could see the Bank of Canada act on interest rates prior to 2023. However, if the uptick in inflation starts to fade in the coming months, we expect the Bank will stay on its current course.
Link: https://mailchi.mp/bcrea/
For more information, please contact:
Brendon Ogmundson Chief Economist 604.742.2796 bogmundson@bcrea.bc.ca |
Kellie Fong Economist 778.357.0831 kfong@bcrea.bc.ca |
BCREA is the professional association for more than 23,000 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the province’s 11 real estate boards, BCREA provides continuing professional education, advocacy, economic research, and standard forms to help REALTORS® provide value for their clients.
To demonstrate the profession's commitment to improving Quality of Life in BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.
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