Ce que révèle une analyse sectorielle des dynamiques récentes de l’inflation au Canada

Decomposing total inflation in Canada as measured by the consumer price index (CPI) into its key macroeconomic factors, as presented in the most recent Monetary Policy Report, is an interesting exercise that shows how the exchange rate pass-through, commodity prices and the output gap have influenced the evolution of the total inflation rate over time. This aggregate approach, however, may mask important sectoral changes. By further exploring some of the major CPI components (energy, food purchased from stores, goods excluding food and energy, and services), we identify the main sector-specific factors that led to the recent inflation dynamics. Our analysis suggests that the evolution of consumer energy prices has been an important source of downward pressure on total inflation, whereas the increases in the prices of food purchased from stores and of other goods have provided a partial offset. This upward pressure reflects, among other things, the effect of the temporary boost from the pass-through of the past depreciation of the Canadian dollar. Finally, the recent growth in services prices has been relatively subdued, owing in part to excess capacity and modest wage growth, which also contributed to the low total inflation rate.