The Consumer Price Index

The Consumer Price Index (CPI) is the cost of a basket of about 600 items representing typical household expenditures such as food, shelter, clothing, furniture, transportation and recreation. The cost of the basket is tallied every month and these prices are tracked by Statistics Canada.

The prices in the basket are measured against a base year (currently 1992) that is assigned a value of 100. In 2002, the basket of goods and services had a value of 119.0, representing an increase of 2.2% from 2001 and 19% cumulatively in the ten years since 1992.

Food and energy costs tend to fluctuate more than other items in the CPI basket, and thus are removed in order to measure price changes for core components of the CPI. The term 'core inflation' refers to the price changes of all goods and services in the basket except food and energy. In 2002, the core inflation rate was 2.7%.

Another price index monitors industrial goods and energy, where rising prices provide an early warning of possible price increases for consumer goods and services. This Industrial Product Price Index remained unchanged in 2002 compared to 2001.