Canadian Inflation Accelerates, Only 2 Provinces Below National CPI

The August Consumer Price Index (CPI) report breached the Bank of Canada (BoC) upper bound. Statistics Canada (StatCan) data shows CPI accelerated further in September. A regional breakdown reveals that only two provinces are below the national average. Headline growth is well above the BoC’s target rate, but some provinces have more than doubled that rate. Canadian Inflation Accelerates, Already Past BoC Upper Bound Canadian CPI annual growth. Source: StatCan. Annual growth of CPI accelerated to 3.1% in September, up from 3.0% in August. The outsized impact of soaring gas prices continues, with CPI ex-gasoline at just 2.2% over the same period. The agency further notes that only 3 of 8 major components saw prices accelerate too. The headline data makes it easy to conclude this is only an energy story. However, a regional breakdown of CPI makes it clear that basket distortions are in play. Only two provinces have seen a rate lower than the national average. Atlantic Provinces Over 2x BoC Target, Only 2 Provinces Below Average Source: StatCan. Despite being above the Bank of Canada (BoC) upper bound of 3.0%, CPI may be skewed by its modelling. A quick look at the provincial breakdow...