June 25, 2024 13:22 GMT
Mixed Takeaways Across CPI Dispersion Measures
CANADA
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- Dispersion measures offer another way to limit any potential impact from the new weights in today’s CPI release.
- Pleasingly for the BoC, our estimates across 185 items suggests that the overall share of the entire CPI basket growing in excess of 3% Y/Y was almost unchanged as it only ticked up from 33% to 33.5%.
- It’s consolidation of a large decline seen previously earlier in the year, returning to the 33% averaged in 2019 having ended 2023 at 55%.
- Where the Bank will be more concerned though is that the services share more than gave up its April improvement. Specifically, 52% of the 54-item basket was growing >3% Y/Y after the 46% in April marked the lowest since Sep’21 in a long-awaited clearer step lower.
- For context, it’s still an improvement from the 63% it ended 2023 but it remains significantly higher than the 31% averaged through 2019.
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