Each month you’ll get an article headline like “Inflation at 3% in July” or whatever. Does that mean prices went up 3% in July, or does it mean across this year the average after July is 3%? I know prices are going up lots lately but if it’s 3% each month that’s 36% a year? Please explain to my silly little brain.
In: Economics
Very short answer, inflation figures are assumed to be annualized unless otherwise stated. So sometimes they have month to month changes but these would be less common. Inflation at 3% in July would very likely be 3% per year as measured in July.
the most commonly used calculation is the 12-month % change of a list of the same items that cover….
Food
Shelter
Household operations, furnishings and equipment
Clothing and footwear
Transportation
Health and personal care
Recreation, education and reading,
Alcoholic beverages, tobacco products and recreational cannabis
The same items are purchased in different provinces and locations across Canada and then weighted when calculating the national number…I think Ontario represents 40% on household spending.
Good details here
https://www.statcan.gc.ca/en/subjects-start/prices_and_price_indexes/consumer_price_indexes/faq
What you are talking about is probably the months average prices compared to the same month the year before. You can take july’s inflation in respect to the previous month but I doubt that would give you something like 3% every month if the economy isnt in big crisis.
There are many ways to describe inflation, what you are problably seeing is the july’s average prices compared to last year’s july. Not this july compared to this june. That is WAY less common way to describe inflation, but it exists too if you search hard enough.
Unless stated otherwise, it’s annualized. Meaning that if inflation was like in July steadily for the entire year, the prices would go up by 3%
It is and should be annualized. There are seasonal factors across almost every segment that would cause pretty significant fluctuations month to month. Comparing prices to the same month of the previous year smooths that out.
Lots of confusing answers here because, as it turns out, the US reports inflation differently from most European countries (not sure about the rest of the world).
In the US, 3% in July means that if that rate continued for another 11 months, prices would have risen 3%. In Europe, it almost certainly means that prices in July 2024 were 3% higher than in July 2023.
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