Inflation Rate Flat as Canada Maintains 2.2% Pace in November
Canada’s annual inflation rate grew by 2.2 per cent in November, unchanged from the previous month, led primarily by an increase in food prices which crossed a two-year peak last month, Statistics Canada said on Monday.
The rise in overall consumer price index, however, was partly offset by annual change in gasoline prices and shelter costs, the statistics agency said.
This was also the first month since March that core measures of inflation, which strips off volatile items, came below the 3-per-cent mark, the upper end of the Bank of Canada’s inflation control range.
Analysts polled by Reuters had forecast the annual inflation at 2.3 per cent and on a month on month basis it was estimated to be at 0.1 per cent.
The monthly inflation in November matched analysts estimates and was lower than October’s 0.2 per cent, Statscan said.
The annual inflation rate in Canada has been subdued since April due to removal of a carbon levy on the sale of gasoline. This has kept the price of the fuel low on a year-on-year basis, helping overall inflation.
Statscan’s data showed that the price of gasoline was up 1.8 per cent in November when compared with October, but on an annual basis it was still 7.8 per cent lower, suppressing the overall CPI.
Without the effect of gasoline, the CPI in November rose by 2.6 per cent.
Food prices, however, continued to rise and has been noted by economists as one of the most significant components of inflation which has stayed resilient despite big cuts in interest rates by the central bank.
Food prices overall rose by 4.2 per cent on a yearly basis in November, spurred by a 4.7-per-cent rise in grocery prices the price of food purchased from stores and 3.3-per-cent rise in food purchased from restaurants.
The last time grocery prices were this high was in December, 2023, Statscan said.
Adverse weather conditions in growing regions and President Donald Trump’s tariffs are usually considered to be driving up food prices, Statscan said.
The BoC’s preferred measures of core inflation – CPI-median and CPI-trim – have hovered around 3 per cent since April when Trump’s tariffs started to take effect.
But this is the first month since tariffs were imposed that the core measures came below 3 per cent.
CPI-median, the centermost component of the CPI basket, edged down to 2.8 per cent in November from 3 per cent in the prior month. CPI-trim, which excludes the most extreme price changes, was also at 2.8 per cent last month from 3 per cent in October.
This article was first reported by The Canadian Press
