Feb 22, 2021
Canada hastily revises core inflation on methodology concerns
Bloomberg News
,We'll see lots of inflation in the service sector as the economy recovers: CIBC's Tal
Statistics Canada revised its measures of core inflation less than a week after receiving negative feedback over its methodological changes.
Revisions published Monday show price pressures are stronger than initially reported. They pushed the average of the Bank of Canada’s preferred measures of core inflation to a yearly increase of 1.77 per cent in January, from 1.5 per cent in the statistics agency’s initial release.
The updated numbers come just five days after the Feb. 17 release, which included a methodological change that left economists, analysts and other market participants puzzled.
“It’s unfortunate how events have unfolded,” Benjamin Reitzes, rates and macro strategist at the Bank of Montreal, said by email. “The magnitude of the revisions, both in size and time horizon, should have prompted further scrutiny from Statscan before the release in order to ensure potential questions could be answered.”
Reversals of this magnitude to a major economic indicator are typically rare, especially this soon after an official data release. An email obtained by Bloomberg shows Statistics Canada apologizing at least 20 economists and analysts for the inconvenience the agency caused, saying it will require more time to properly assess the new methodology.