Inflation rose 2.2 per cent in March 2021 compared to March 2020, according to Statistics Canada. Month-to-month inflation rose 1.1 per cent in March over February. (THE CANADIAN PRESS/Justin Tang)

Inflation rose 2.2 per cent in March 2021 compared to March 2020, according to Statistics Canada. Month-to-month inflation rose 1.1 per cent in March over February. (THE CANADIAN PRESS/Justin Tang)

Inflation up 2.2% in March but figures reflect declines during pandemic

Monthly inflation rose 1.1 per cent in March over February

Inflation rose 2.2 per cent in March 2021 compared to March 2020, according to Statistics Canada. Month-to-month inflation rose 1.1 per cent in March over February.

These new figures appear against the backdrop of concerns that inflation will rise as the COVID-19 pandemic subsides. But an analysis of the recent numbers points out that a large share of this increase reflects the base-year effect. It refers to the impact that price movements from 12 months earlier have on the current month’s headline consumer inflation. The start of the pandemic in March 2020 caused a broad decline in various categories, leaving room for significant gains 12 months later.

RELATED: Stats Canada expects COVID-19 to impact inflation

This is certainly the case when looking at gasoline prices. Compared to March 2020, gasoline prices in March 2021 rose 35.3 per cent. “About one-fifth of the acceleration in the gasoline index is the result of this base-year effect, while one-third comes from the current effects influencing price change from February to March 2021,” it reads.

Housing costs as measured by homeowners’ replacement cost and other accommodation expenses rose 7.9 per cent and six per cent respectively. Overall, shelter prices rose 2.4 per cent on a year-over-year basis in March, even as mortgage rates have been dropping.

This base-year effect also works the other way. Clothing for women and men (no need to dress up while working from home) dropped 8.3 and seven per cent respectively, while accommodation costs while travelling dropped 17.2 per cent in March 2021 compared to March 2020.

This base-year effect is temporary. “In the coming months, the price declines observed in March and April 2020 will fall out of the 12-month price movement,” it reads. “Users should consider the impact of base-year effects when interpreting the 12-month price movement in the coming months.”

In other words, any future warnings about inflation should be read with the caveat that these increases might in part reflect a return to the status quo prior to the pandemic.


Do you have a story tip? Email: vnc.editorial@blackpress.ca.

Follow us on Twitter and Instagram, and like us on Facebook.

wolfgang.depner@peninsulanewsreview.com

Construction

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A map showing where the most number of cases were recorded from April 23 to 29. This map, revealing a breakdown of infections by neighborhood, was pulled from a data package leaked to the Vancouver Sun last week (and independently verified).
36 Abbotsford schools flagged for COVID-19 exposures in the last 2 weeks, shattering record

Clearbrook Elementary recorded an ‘exposure’ on all 11 school days

<a href="Facebook users reported seeing a body on the side of the road this morning." target="_blank"></a>Facebook users reported seeing a body on the side of the road this morning. (File photo)
Man killed in fatal hit-and-run collision between Abbotsford and Chilliwack

Body reported at 6 a.m., police close North Parallel Road, single highway lane as they investigate

Westbound traffic is slow moving on Highway 1 following a crash that has police blocking one lane. Google Maps screenshot taken at 9:07 a.m.
TRAFFIC: Crash on North Parallel Road causes road closure, single westbound Highway 1 lane blocked

Abbotsford Police investigating, roads closed between McDermott and No. 3 Road

Kassandra Clack of Abbotsford has been named one of 18 finalists in the Jim Beam Virtual National Talent Search, taking place in June.
Fraser Valley country singer Kassandra Clack a finalist in national talent search

18 finalists vie to win Jim Beam Virtual National Talent Search in June

Mandeep Grewal was gunned down outside an Abbotsford bank in October 2018. Police said a violent gang war to control drug-line territory was going on at that time. Drug charges have now been announced against seven people. (FILE PHOTO: John Morrow/Abbotsford News)
7 people face 38 charges related to gang drug activity in Abbotsford and Mission

Police say investigation began in 2018 into expansion of Brothers Keepers’ drug line

(The Canadian Press)
Trudeau won’t say whether Canada supports patent waiver for COVID-19 vaccines

‘Canada is at the table to help find a solution’

Twenty-nine staff members at Sunrise Poultry Processors Ltd. in Newton have tested positive for the virus, according to an information bulletin from Fraser Health Saturday (May 8). The health authority issued a 10-day closure order, effective May 7. (Image: Google Maps)
29 staff test positive for COVID-19 at Surrey poultry processing plant

Meantime, outbreak over at Surrey Memorial Hospital

Canada’s chief public health officer is reminding Canadians even those who are fully vaccinated are not immune from transmitting the COVID-19. THE CANADIAN PRESS/Adrian Wyld
Canada’s top doctor warns full vaccination does not equal full protection from COVID-19

Post-inoculation, Theresa Tam says the risk of asymptomatic infection and transmission is far lower but not obsolete

The dash cam footage, taken May 7 at 8:18 a.m. belonged to the driver of a southbound vehicle that recently travelled out of the tunnel. (Reddit/Screen grab)
VIDEO: Dash cam captures dramatic rollover crash on Highway 99

Only one person sustained injuries from the collision, says B.C. Ambulance Services

Chevy stranded on a ledge above a rocky canyon at Mimi Falls near Logan Lake, April 28, 2021. (Photo credit: Margot Wikjord)
Police officer and fire chief team up in risky rescue of stranded dog near Logan Lake

Chevy, a rescue dog, needed rescuing again after getting stuck on a ledge above rocky canyon

Police were on the scene of a fatal shooting in Abbotsford. (Black Press Media files)
B.C. government to give more than $8 million for programs to curb gang violence

221 not-for-profit projects led by local governments and school districts among others will receive a one-time grant

Vancouver Giants earned a 6-2 victory over the visiting Kelowna Rockets Friday night, May 7, in Kamloops (Allen Douglas/special to Langley Advance Times)
VIDEO: Vancouver Giants down Kelowna Rockets 6-2

Two short-handed goals for Langley-based team

Gord Judson steers his log truck down a forest service road, using two-way radio and call signals to mark his position for oncoming traffic. (B.C. Forest Safety Council)
Planning some B.C. wilderness fishing? Don’t catch a log truck

Remote recreation areas bracing for heavy pandemic pressure

Most Read