Central bank mandates have Canadian inflation higher than U.S.: TD economist
BNN Bloomberg
Inflation appears to be receding faster in the U.S. than it is in Canada, and a TD economist says that’s because of different central bank mandates and methodology between the two countries.
On Friday, the U.S. government reported year-over-year inflation of 2.6 per cent for December, while Statistics Canada reported last week that Canada’s core inflation climbed to 3.4 per cent that same month.
Beata Caranci, chief economist at TD Bank, said one reason the U.S. appears to have tamed inflation more effectively than Canada is because data is calculated differently in each country.
In the U.S., shelter costs amount to 15 per cent of the core goods calculation. In Canada, shelter represents 30 per cent of that calculation, which will make it harder for Canada to reach its goal of bringing inflation down to two per cent, she said.
