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January 2023 Bank of Canada announcement
January 27, 2023
6:26 pm
Vatox
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dommm said

Nothing wrong with my statement & I'm assuming the chart although I did not build the chart.
PS: That chart is from Jan to Dec.  

dommm said

Nothing wrong with my statement & I'm assuming the chart although I did not build the chart.
PS: That chart is from Jan to Dec.  

Yes there is!

January 27, 2023
6:28 pm
Bill
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To me the chart shows May CPI at 151.9 and December at 153.1, thus CPI increased by .79% (less than 1%) over that time span. Is that what you were pointing out, dommm?

January 27, 2023
6:31 pm
dommm
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Bill said
To me the chart shows May CPI at 151.9 and December at 153.1, thus CPI increased by .79% (less than 1%) over that time span. Is that what you were pointing out, dommm?  

Yup

January 27, 2023
6:32 pm
Vatox
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Bill said
To me the chart shows May CPI at 151.9 and December at 153.1, thus CPI increased by .79% (less than 1%) over that time span. Is that what you were pointing out, dommm?  

Yes, the point trying to make was about CPI remaining flat-like and the zero comment is misplaced understanding.

January 27, 2023
6:35 pm
AltaRed
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mordko said
I understand you stand by it but its wrong. The numbers at the top of the bars show CPI values from May to December.  

As you have correctly stated, aggregate cost of living (prices) has been approximately flat overall since May 2022. It is astounding how that cannot be understood.

January 27, 2023
6:36 pm
dommm
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Vatox said

Yes, the point trying to make was about CPI remaining flat-like and the zero comment is misplaced understanding.  

Bill understood. sf-confused

January 27, 2023
6:37 pm
dommm
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AltaRed said

As you have correctly stated, aggregate cost of living (prices) has been approximately flat overall since May 2022. It is astounding how that cannot be understood.  

Thanks sf-laugh

January 27, 2023
7:44 pm
Vatox
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dommm said

Thanks sf-laugh  

That wasn’t for you dommm. Your statement was:

From May to Dec the CPI was basically zero so we are on track for a much lower CPI if this trend continues.

Which is incorrect. CPI isn’t “basically zero”. The change in CPI is what you meant. Or, as AltaRed said aggregate costs are flat.

It may have been what you meant, but isn’t what you said.

January 28, 2023
9:27 am
dommm
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Vatox said

That wasn’t for you dommm. Your statement was:

From May to Dec the CPI was basically zero so we are on track for a much lower CPI if this trend continues.

Which is incorrect. CPI isn’t “basically zero”. The change in CPI is what you meant. Or, as AltaRed said aggregate costs are flat.

It may have been what you meant, but isn’t what you said.  

So I take back my thanks then lol. At least Bill knew what I meant without having to correct my improper phrasing.

January 28, 2023
10:17 am
Norman1
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Those who have been following the CPI numbers knew what you meant. sf-smile

CPI turned the corner in July 2022. It ended the steep 12.8% per annum climb it was on since January 2022 and has been on a 1.2% per annum trajectory since:

CPI-202212.png

If it continues as it has for another six months, then, arithmetically, we will have a year-over-year CPI change of under 2%. That's why the Bank of Canada predictions are not much of a stretch.

January 28, 2023
11:11 am
mordko
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There is “much of a stretch” because core, median, and trim CPI have shown consistent upwards trend.

Volatile gasoline prices did drop significantly due to Covid measures in China and warm winter but will jump again unless we see a recessions as energy supplies are a problem which can’t be resolved quickly. Its the large drop in energy prices which made headline inflation numbers look a bit better in recent months.

But… A serious recession would “help” with inflation. Presumably this is the most probable scenario now. Not particularly surprising. The bank was too late to act against inflation, which tends to result in a deeper recession when it is finally forced to.

January 28, 2023
12:54 pm
Vatox
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Norman1 said
Those who have been following the CPI numbers knew what you meant. sf-smile  

This forum can have many, other than “CPI Followers”, that may not understand and that is why correction is needed. It isn’t about pointing a finger at those that make mistakes or have an incorrect understanding, it’s about correct information so that others are not given poor direction into new knowledge.
dommm was clearly adamant about his statement and it was simply incorrect. Many of us understood what was meant, but others may take his statement literally word for word and that feeds ignorance.

January 28, 2023
2:05 pm
TommyT
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mordko said
There is “much of a stretch” because core, median, and trim CPI have shown consistent upwards trend.

Volatile gasoline prices did drop significantly due to Covid measures in China and warm winter but will jump again unless we see a recessions as energy supplies are a problem which can’t be resolved quickly. Its the large drop in energy prices which made headline inflation numbers look a bit better in recent months.

But… A serious recession would “help” with inflation. Presumably this is the most probable scenario now. Not particularly surprising. The bank was too late to act against inflation, which tends to result in a deeper recession when it is finally forced to.  

Speculators have yet to short silver and are still long copper meaning an expansion rather than a recession if they're right. Amount bet per person has not fallen at the racetracks. The U.S. dollar is falling which in due time will drive inflation higher in America. Lag about 6 to 8 months so in another 2 to 4 months' time.

January 28, 2023
4:51 pm
AltaRed
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https://prefblog.com/wp-content/uploads/2023/01/inflationProjections.jpg is an interesting chart. It may be that BoC will now have it right if the CPI trends above hold.

January 28, 2023
5:06 pm
Loonie
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I get the feeling my whole life is being manipulated by bankers.sf-frown

January 29, 2023
5:15 am
canadian.100
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Loonie said
I get the feeling my whole life is being manipulated by bankers.sf-frown  

Owning some shares of the big six might have helped reduce your agony. sf-wink

January 29, 2023
5:47 am
savemoresaveoften
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canadian.100 said

Owning some shares of the big six might have helped reduce your agony. sf-wink  

or own a lot of bank shares and you will actually be happy and not just unhappy / agony reduction 🙂

Banks, telco, utilities are a necessity, day in and day out, cant live without them

January 29, 2023
8:38 am
Norman1
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mordko said
There is “much of a stretch” because core, median, and trim CPI have shown consistent upwards trend.

No, they do not.

The "Consumer Price Index (CPI), all-items excluding eight of the most volatile components as defined by the Bank of Canada and excluding the effect of changes in indirect taxes, seasonally adjusted" shows that core CPI prices have been climbing at 3.7% per annum since June 2022. That's down considerably from their 8.3% per annum climb for a few months before that:

2022CoreCPI.png
If the current trend is maintained for another six months, the year-over-year core CPI inflation will end up down to around 3.7%.

January 29, 2023
9:20 am
savemoresaveoften
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That’s still 3.7% vs their current ‘target’ of 2%. But as I predict few months ago and still valid in my mind, they will consider mission accomplished if CPI goes down to high 2/3% area over the next 12 months, esp if they r able to avoid a deep recession somehow.

January 29, 2023
9:44 am
Norman1
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savemoresaveoften said
That’s still 3.7% vs their current ‘target’ of 2%. …

No, it is not.

The target is the regular total CPI changes, not core CPI changes. Core CPI is intended to avoid reacting incorrectly with interest rate changes to CPI movements from things like tariff hikes that have nothing to do with supply-demand balance:

Measures of inflation
The Bank of Canada aims to keep inflation at the 2 per cent midpoint of an inflation-control target range of 1 to 3 per cent. The inflation target is expressed as the year-over-year increase in the total consumer price index (CPI). The CPI is the most relevant measure of the cost of living for most Canadians because it is made up of goods and services that Canadians typically buy, such as food, housing, transportation, furniture, clothing, recreation, and other items.

The Bank also monitors a set of “core” inflation measures that allow the Bank to “look through” temporary changes in total CPI and focus on the underlying trend of inflation. In this sense, these core measures of inflation act as an operational guide to help the Bank achieve the total CPI inflation target. …

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