The Globe and Mail reports in its Thursday, May 20, edition that
Statistics Canada's new numbers for April, the highest inflation rate in nearly a decade, raised some eyebrows. The Globe's David Parkinson writes that while economists had expected a spike in inflation in April, 3.4 per cent was more than most had anticipated.
The Globe says the April CPI report is not a huge worry.
The Globe notes that it is a single month of data, reflecting a highly abnormal and severely depressed period a year ago, and an unusual yet surprisingly strong recovery that is taking hold. It is a snapshot of a couple of twisted bookends bracketing a deeply weird year.
On the other hand, it also cannot be readily dismissed as a mere statistical blip.
Many economists have been saying for months that inflation would appear to surge around now, owing to what they call "base effects." Because the inflation rate is determined by comparing prices now with those 12 months ago (the "base"), we are now measuring CPI against the early weeks of the COVID pandemic, when prices for many key consumer goods and services plunged. Mr. Parkinson says it is more a quirk of timing than evidence of meaningful inflation.
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