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ECONOMIC NEWS
François Dupuis, Vice-President and Chief Economist • Mathieu D’Anjou, Deputy Chief Economist Hélène Bégin, Senior Economist • Benoit P. Durocher, Senior Economist • Francis Généreux, Senior Economist • Joëlle Noreau, Senior Economist
Desjardins, Economic Studies: 418-835-2450 or 1 866-835-8444, ext. 5562450 • [email protected] • desjardins.com/economics
NOTE TO READERS: The letters k, M and B are used in texts and tables to refer to thousands, millions and billions respectively.IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. The data on prices or margins are provided for information purposes and may be modified at any time, based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. The opinions and forecasts contained herein are, unless otherwise indicated, those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group. Copyright © 2019, Desjardins Group. All rights reserved.
Quebec: The 2018 Inflation Rate Is below 2% HIGHLIGHTS
f In December 2018, the consumer price index (CPI) rose 1.1% from December 2017. The increase was lower than it was for Canada as a whole (+2.0%).
f Overall for 2018, Quebec’s inflation rate accelerated to 1.7% after hovering close to 1% for the previous five years. This was the largest annual increase since 2012 (+2.1%).
f Quebec’s CPI growth of 1.7% for 2018 was below that of Canada (+2.3%) and Ontario (+2.4%).
f Nearly all components posted faster gains last year in Quebec.
f The food price index rose 1.0% in 2018, while the shelter index advanced 1.5%.
f Energy prices increased 6.5% last year, putting upside pressure on total inflation. The CPI that excludes the energy component rose 1.3%.
ECONOMIC STUDIES | JANUARY 18, 2019
COMMENTS
Although Quebec’s inflation rate accelerated last year, it remained relatively low, i.e., below the 2% mark. Prices for basic goods such as food, shelter and clothing, as well as living expenses, all posted increases of less than 1.5%. However, the transportation component climbed 4.4% due to higher costs for energy, air transportation and insurance. Note that oil and gas prices shot up in the first half of 2018, then tumbled after that.
IMPLICATIONS
Although the inflation rate rose more quickly last year, this did not erode Quebecers’ purchasing power. The labour market tightened further, posting an annual unemployment rate of 5.5%. This helped push workers’ wages up by about 3.5% in 2018, outpacing the 1.7% inflation rate.
Hélène Bégin, Senior Economist
GRAPH 1Inflation is up in 2018 after several weak years
Sources: Statistics Canada and Desjardins, Economic Studies
Consumer price index
Variation in %
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2010 2011 2012 2013 2014 2015 2016 2017 2018
#1 BEST OVERALLFORECASTER - CANADA
0.1
0.5
0.6
0.8
1.0
1.5
1.7
2.7
4.4
0 1 2 3 4 5
Recreation, education and reading
Household operations
Health and personal care
Clothing and footwear
Food
Shelter
All items
Alcoholic beverages and tobacco
Transportation
GRAPH 2Few CPI components rose sharply
CPI: Consumer price indexSources: Statistics Canada and Desjardins, Economic Studies
2018
Annual variation in %