Episode 348 - Andrew Barclay (StatCan): Measuring Inflation
The Rational Reminder Podcast
Unpacking Inflation Measurement
This chapter explores the complexities of inflation measurement, focusing on the Consumer Price Index (CPI) and the methodologies behind it. It addresses common misconceptions regarding government data and highlights the commitment of statisticians to accuracy. Additionally, it examines shifts in consumer behavior and the impact of the COVID-19 pandemic on inflation data collection methods.
Is the government manipulating inflation data? Why do so many people feel like their personal costs are rising faster than official inflation numbers suggest? In this episode of the Rational Reminder Podcast, we dive deep into one of the most debated and misunderstood economic topics: inflation. Today, we are joined by Andrew Barclay, an economist and senior analyst in the Consumer Price Division at Statistics Canada, to discuss everything you need to know about inflation and the Consumer Price Index (CPI). Statistics Canada is Canada’s national statistical agency dedicated to producing accurate, relevant, and timely data to help Canadians better understand their country. In our conversation, we unpack how inflation and the CPI are calculated and why it is so important. We explore the controversy around CPI calculations and the influence of inflation on government benefits, tax brackets, and the overall economy. Andrew also addresses scepticism and conspiracy theories about government inflation reporting, uncovers drivers of the perception gap, and explains how Statistics Canada ensures the accuracy and integrity of its data. Join us to hear the real story behind CPI and inflation with Andrew Barclay!
Key Points From This Episode:
(0:00:00) Background about Andrew and what inspired today's topic.
(0:05:33) Find out why measuring inflation is important and how the CPI is calculated.
(0:10:08) What goes into the CPI basket and how frequently the contents are updated.
(0:12:42) How consumer choices impact inflation and how 'shrinkflation' is accounted for.
(0:15:43) Learn how quality adjustments are accounted for in the CPI and why they matter.
(0:19:01) Scepticism surrounding quality adjustments and how the CPI adapts to crises.
(0:25:21) The role of grocery price tracking and why Canada uses a single CPI measure.
(0:28:08) Explore the idea of personal inflation and why it is usually different to the CPI.
(0:31:10) The difference between home prices and housing costs and how they are calculated.
(0:35:41) Hear how Statistics Canada's approach for housing compares to other methodologies.
(0:41:15) Perceived inflation versus actual inflation and drivers of the inflation perception gap.
(0:51:58) Statistics Canada's method of dealing with the perception gap and ensuring quality.
(0:55:51) Uncover the most criticized indexes and how Statistics Canada includes feedback.
(1:01:52) Andrew's message for those who do not trust the CPI and his definition of success.
Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://x.com/RationalRemindRational Reminder on TikTok — www.tiktok.com/@rationalreminder
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — info@rationalreminder.caBenjamin Felix — https://pwlcapital.com/our-team/
Benjamin on X — https://x.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP
Andrew Barclay on LinkedIn — https://www.linkedin.com/in/andrew-barclay-a38b6035/
Statistics Canada — https://www.statcan.gc.ca/
Canadian System of National Accounts | 'Catalogue of products' — https://publications.gc.ca/Collection/Statcan/13F0029X/13F0029XIE2000001.pdf
Bank of Canada — https://www.bankofcanada.ca/
Canadian Real Estate Association (CREA) — https://www.crea.ca/
Episode 323: Renting Versus Buying a Home in Canada 2005-2024 — https://rationalreminder.ca/podcast/323
Surveys of Consumers | University of Michigan — https://data.sca.isr.umich.edu/
Statistics Canada | The Daily — https://www150.statcan.gc.ca/n1/dai-quo/index-eng.htm
Books From Today’s Episode:
The Courage to Be Disliked — https://www.amazon.com/Courage-Be-Disliked-Phenomenon-Happiness/dp/1501197274
Papers From Today’s Episode:
'The naked eye versus the CPI: How does our perception of inflation stack up against the data?' — https://www.statcan.gc.ca/o1/en/plus/256-naked-eye-versus-cpi-how-does-our-perception-inflation-stack-against-data
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