After
excluding some volatile items such as energy, core inflation in December rose to 1.3 per cent compared to 1.1 per cent in November.
The exception to this is the price index for market goods and services (
excluding volatile items), which increased by 1.8 per cent over the year, reflecting weaker quarterly growth earlier in 2003 (relative to other measures).
This appreciation contributed to a 0.5 per cent fall in prices of tradables (
excluding volatile items) in the September quarter; over the year, prices of tradables were broadly unchanged (Graph 70).
The exclusion of health services, as well as a number of other services provided by the public sector, largely explains the relatively modest increase in the market goods and services
excluding volatile items measure of underlying inflation over the past year.
Measures of underlying inflation increased by 1/2 per cent in the June quarter and, with the exception of the market goods and services
excluding volatile items measure, increased by between 2 1/2 and 3 per cent in year - ended terms (Graph 69).
Not exact matches
Further, over 60 per cent of the «core» Consumer Price Index that
excludes more
volatile items is posting gains of 1.5 per cent or more and one - third of the basket exceeds the Bank of Canada's 2 per cent inflation target.
Market prices, which
exclude both administered and
volatile items, were flat in the quarter and up by only 1.3 per cent in the year.
Volatile items, such as fruit and vegetables, also contributed significantly to inflation:
excluding such
items, the CPI rose by only 0.5 per cent in the quarter.
Core Inflation is a measure of inflation that
excludes certain
items that face
volatile price movements.
Excluding prices for energy, food and other
volatile items, the core rate of inflation was unchanged at 0.9 %.
Inflation data published last week showed the headline personal consumption expenditure (PCE) inflation index hit a 2 per cent annual pace in the year to March and the Fed's preferred underlying measure, the core PCE which
excludes volatile energy and food
items, rose to 1.9 per cent.
The Bank of Canada's core index, which
excludes some of the most
volatile items, was up 2.2 per cent in April compared with a year ago.
In Canada, the core inflation rate tracks changes in prices that consumers pay for a basket of goods which
excludes some
volatile price
items.