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It seems inflation isn’t quite dead yet:

Canada’s inflation rate unexpectedly held steady in November as the services sector put upward pressure on consumer prices, a slight hiccup as the Bank of Canada looks to tame inflation.

The Consumer Price Index rose 3.1 per cent in November from a year earlier, matching October’s increase, Statistics Canada said Tuesday in a report. Analysts on Bay Street were expecting the inflation rate to ease to 2.9 per cent.

On a monthly basis, the CPI rose 0.1 per cent in November, whereas analysts were expecting a slim decline.

Beneath the surface, however, there were signs of progress. Various core measures of inflation – which remove volatile price movements from the CPI – continued to slow.
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The services side of the economy is a major source of inflationary pressure. Over all, prices for services rose 4.6 per cent in November from a year earlier, matching the increase in October.

Rents climbed by 7.4 per cent over the past year, down from 8.1 per cent in October, but still well above typical levels. Mortgage interest costs are still rising by around 30 per cent, year over year.

Grocery prices rose 4.7 per cent on an annual basis – the first reading below 5 per cent since November, 2021. This moderation was foreshadowed by pricing at earlier stages of the supply chain.
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One of the more promising signs in Tuesday’s report is that some measures of core inflation are simmering down. The Bank of Canada’s preferred measures – CPI-median and CPI-trim – rose at three-month annualized rates of 2.3 per cent and 2.6 per cent, respectively. They were in the 3.5-per-cent range in recent months.

This entry was posted on Tuesday, December 19th, 2023 at 9:21 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.