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 mother duck leads her brood of ducklings past some benches in the courtyard at Mark R Isfeld School in Courtenay. Photo by Kailena Krutzmann
Ducklings bring joy to students at Courtenay school

Brood of duckings in the courtyard at Mark R Isfeld School

The current location of Comox Valley Search and Rescue on Moray Avenue in Courtenay. Google Maps photo
Comox Valley Search and Rescue aiming to purchase a roof for their rescuers

Their goal is to raise between $1.2 and $1.5 million, approximately the purchase price of a facility

A bear is seen walking down Alderwood Place in east Courtenay Sunday (May 9) morning. Video screenshot/Kristie Cave
Video: Bears spotted throughout Comox Valley

Hide food sources, keep garbage away: conservation

Carter Woods was first across the line at the UCI Mountain Bike World Cup, Saturday in Altstadt, Germany. File photo
Cumberland mountain biker wins World Cup race in Germany

Carter Woods of Cumberland won a World Cup mountain bike race Saturday… Continue reading

The flowers of Darmera peltata (Indian rhubarb) before the leaves emerge. Photo by Leslie Cox
DUCHESS OF DIRT: Plenty of ‘wow’ factor in the garden in spring

Leslie Cox Special to The Record I can’t help it. I like… Continue reading

A bullet hole is seen in the windshield of an RCMP vehicle approximately 4 km from Vancouver International Airport after a one person was killed during a shooting outside the international departures terminal at the airport, in Richmond, B.C., Sunday, May 9, 2021. THE CANADIAN PRESS/Darryl Dyck
Homicide team IDs man in fatal YVR shooting as police grapple with spate of gang violence

Man, 20, charged in separate fatal shooting Burnaby over the weekend

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

The following is a list of restaurants offering take-out and patio dining. ADOBE STOCK IMAGE
List of Comox Valley restaurants offering take-out, patio dining options

Restaurants in the Comox Valley continue to adapt to government-imposed restrictions in… Continue reading

The only access to 5th Street bridge heading east (toward Lewis Park) is via Anderton Avenue. Photo by Terry Farrell.
Single lane alternating traffic controls on Courtenay bridge now in effect

Single lane alternating traffic on the 5th Street Bridge is now in… Continue reading

RCMP are searching for Philip Toner, who is a ‘person of interest’ in the investigation of a suspicious death in Kootenay National Park last week. Photo courtesy BC RCMP.
RCMP identify ‘person of interest’ in Kootenay National Park suspicious death

Police are looking for Philip Toner, who was known to a woman found dead near Radium last week

Vancouver Canucks goaltender Thatcher Demko (35) makes a save on Winnipeg Jets’ Nate Thompson (11) during second period NHL action in Winnipeg, Monday, May 10, 2021. THE CANADIAN PRESS/Fred Greenslade
Vancouver Canucks see NHL playoff hopes dashed despite 3-1 win over Winnipeg

Montreal Canadiens earn final North Division post-season spot

The B.C. legislature went from 85 seats to 87 before the 2017 election, causing a reorganization with curved rows and new desks squeezed in at the back. The next electoral boundary review could see another six seats added. (Black Press files)
B.C. election law could add six seats, remove rural protection

North, Kootenays could lose seats as cities gain more

The Independent Investigations Office of B.C. is investigating the shooting of an Indigenous woman in the Ucluelet First Nation community of Hitacu. (Black Press Media file photo)
B.C. First Nation wants ‘massive change’ after its 3rd police shooting in less than a year

Nuu-chah-nulth woman recovering from gunshot wounds in weekend incident near Ucluelet

Nurse Gurinder Rai, left, administers the Moderna COVID-19 vaccine to Maria Yule at a Fraser Health drive-thru vaccination site, in Coquitlam, B.C., on Wednesday, May 5, 2021. The site is open for vaccinations 11 hours per day to those who have pre-booked an appointment. THE CANADIAN PRESS/Darryl Dyck
COVID vaccine bookings to open for adults 40+, or 18+ in hotspots, across B.C.

Only people who have registered will get their alert to book

Most Read