The consumer price index held steady and core measures cooled in November
Inflation was unchanged in Canada last month, holding steady at an annual pace of 2.2% as core measures saw a welcome cooldown.
Statistics Canada data on Monday showed that the consumer price index (CPI) came in lower than economists had expected for the month as a slowdown in services price growth cancelled out higher goods costs.
The “core” measures preferred by the Bank of Canada, meanwhile, both slowed in a welcome sign for the central bank. The median and trim gauges fell to 2.8%, down 0.2% over the prior month, signalling that upward pressure on prices isn’t strengthening for now.
Mortgage interest costs no longer feature among the main upward contributors to Canadian inflation. Telephone services were the most prominent factor, rising by 11.7%, while rent inflation rose to 4.7% year over year.
Natural gas costs slid by 16.5%, with gasoline prices down 7.8% and air transportation costs falling by 5.9%. The cost of travel tours slipped by 8.2%, and homeowners’ replacement costs were 1.6% lower.
The Bank of Canada held its benchmark interest rate steady last week in its final decision of the year, leaving that trendsetting rate unchanged at 2.25% and indicating a likely protracted pause as it weighs the inflation outlook.
But while some observers believe the central bank’s likely next move is a hike, today’s inflation reading offers some hope for market watchers who are betting that won’t happen.
Despite the trade war launched earlier in the year by US president Donald Trump, an inflationary spike from counter-tariffs has yet to emerge – and Canadian prime minister Mark Carney has quietly eased many of those measures against the US in recent months.
Inflation has remained largely under control this year, falling significantly since the central bank introduced a flurry of rate hikes in 2022 and 2023 to combat a COVID-era CPI surge.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
