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May 09, 2022ADJUSTED PRICE INDEX FOR CONSUMER SPENDING During the pandemic Statistics Canada has developed adjusted basket weights for consumer prices to provide insight into shifting expenditure patterns during this time. Background methodological studies are available in:
Consumer expenditures during COVID-19: An exploratory analysis of the effects of changing consumption patterns on consumer price indexes
Adjusted Price Index and Monthly Adjusted Consumer Expenditure Basket Weights.
Typically, expenditure patterns evolve slowly and in a sustained manner over time. COVID-19 significantly altered consumer behaviour over a very short period of time, likely affecting consumption patterns which by design are not accounted for by the official CPI fixed basket weights. The adjusted weights uses more recent expenditure data that is less complete than the official weights changed on schedule every 2 years. Statistics Canada notes, "This analytical work is experimental and should not be used instead of the official measure of consumer price inflation. Updating the weights in official Consumer Price Index (CPI) basket of goods and services to account for consumption changes in the absence of a reliable and robust source of expenditure data would compromise the accuracy of the index values."
The latest adjusted weights for January 2022 to March 2022 have been released for comparison with official CPI. The adjusted weights and adjusted price index are available at the national level.
In the most recent months, consumer spending on shelter has been higher than the official basket weights as there have been higher costs for both owned accommodation and rented accommodations. The adjusted weight for transportation rose above the official weight in March 2022 as Canadians spend a larger share of household expenditures on gasoline as prices increased. Clothing and footwear also had a higher weight in March 2022 than the official basket. The adjusted weights were under the official weight for food. In March 2022, the food weight fell as Canadians directed less spending to meat and fresh vegetables less as prices declined. The adjusted price indexes for household operations; furnishings and equipment; health and personal care; recreation, education and reading; and alcoholic beverages, tobacco products and recreational cannabis were below official CPI basket weight in March 2022.
The adjusted price index and the official price index have had very similar monthly changes since June 2021 with the monthly percent change never differing by more than 0.1 percentage points. Overall from May 2021 through March 2022, the Canada official CPI index has increased 5.6% and the adjusted price index has increased 5.4%.
Source: Statistics Canada, Consumer expenditures during COVID-19: An exploratory analysis of the effects of changing consumption patterns on consumer price indexes and Adjusted Price Index and Monthly Adjusted Consumer Expenditure Basket Weights
Statistics Canada. Table 18-10-0264-01 Monthly adjusted consumer expenditure basket weights
Statistics Canada. Table 18-10-0271-01 Adjusted price index, monthly percentage change
Statistics Canada. Table 18-10-0004-01 Consumer Price Index, monthly, not seasonally adjusted
Statistics Canada. Table 18-10-0007-01 Basket weights of the Consumer Price Index, Canada, provinces, Whitehorse, Yellowknife and Iqaluit
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