Canada's inflation rate came in lower than economists had expected for November
Canada’s annual inflation rate dropped to 1.9% in November, a lower reading than economists had expected as mortgage interest costs continued to fall.
Statistics Canada said on Tuesday morning that the consumer price index (CPI) dipped from a 2% October reading last month with the mortgage interest cost index slowing for the 15th month in a row – although mortgage servicing costs and rent increases remain the biggest contributors to overall inflation.
Rent prices were up 7.7% across the country in November compared with 7.3% in October, driven mainly by upticks in Ontario and Manitoba. Overall shelter prices have climbed by 18.9%, StatCan said, over the past three years.
Without taking gasoline price increases into account, the CPI accelerated by 2.2% year over year in November.
The national statistics agency said grocery prices remain elevated despite slowing price growth for food purchased from stores. Those costs are up 2.6% compared with the same time last year – but have spiked by 19.6% since November 2021.
After surging to a 39-year high of 8.1% in the middle of 2022, inflation has been on a steady downward trajectory thanks in large part to a series of aggressive interest rate hikes by the Bank of Canada.
The central bank has trimmed its benchmark rate in recent months with the CPI falling well within its target range of 1-3%, and Governor Tiff Macklem said on Monday that a review next year will assess whether 2% remains the best target for inflation.
In its final rate decision of the year last week – a 50-basis-point cut – the Bank said the current level of inflation, excess supply in the economy and the likelihood of softer-than-expected economic growth had justified an oversized reduction.
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