CANADIAN CPI · YEAR OVER YEAR BoC INFLATION TARGET1%FLOOR
2%★ TARGET
3%CEILING
The Bank of Canada's 1-3% control band. Above 3% = pressure to hike rates. Below 1% = pressure to cut. The midpoint (2%) is the explicit target.
CURRENT IMPLICATION—
★ WHAT'S DRIVING INFLATION ★
The 8 CPI components
★ Bar length = year-over-year change · Pill size = weight in CPI basket
Shelter28.4% of basket
Rent + mortgage interest + insurance + utilitiesServices8.4% of basket
Healthcare + education + commsAlcohol & tobacco4.5% of basket
Cannabis + alcohol + tobaccoFood16.8% of basket
Groceries + restaurantsHousehold ops15.4% of basket
Furniture + appliances + suppliesRecreation5.4% of basket
Travel + entertainment + sportsTransportation16.5% of basket
Gas + vehicles + transitClothing4.6% of basket
Apparel + footwear★ 12-MONTH ROLLING ★
YoY inflation trajectory
★ INFLATION IN REAL $ ★
What inflation costs you
$100 IN 2020$—Now buys what $100 did 5 years ago
ANNUAL $5K GROCERY BILL+$—Extra spent this year vs last (at headline CPI)
$1k/MO RENT+$576Annual cost increase at 4.8% shelter inflation