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Originally Posted by bluejays
Question about interest rates and inflation. Stats say that inflation in Canada is at 5% but is coming down fairly rapidly. We know that inflation numbers include a variety of things more than just food, but supply chain issues and whatever is causing food prices to be very high, are still very present. Even if inflation drops to 3% this summer, how are food prices still so high in reality and how can we say inflation is only 3% when food and gas seems much higher than this? What’s offsetting this?
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While it's one of the more visible expenses, food is ultimately only about 16% of the average person's expenditures, so it'd be the other 84% that's mitigating that. Gas for instance, was actually about 5% cheaper in February 2023 vs February 2022. So things like the following are seeing lower increases:
Clothing: 1.9%
Recreation/education: 2.1%
Household Operations: 4.1%
Transportation: 3.1%
Those things together are 45% of the CPI basket, and have a weighted average inflation rate of 3.1%. So that stacks against the other 55% which has higher inflation rates, and as a result the overall rate is at 5.2%.