According to Statistics Canada, the slowdown in price growth is mostly driven by lower mortgage interest costs and cheaper travel tours.
Inflation largely came down across the board. The price increase of groceries slowed to 2.6 per cent compared to the same time a year ago. But those costs are still high, having risen 19.6 per cent since November 2021, the agency said.
While the headline inflation rate hit the Bank of Canada’s two per cent target in September, its preferred core measures of inflation are still trending well above that number. The CPI-median is at 2.6 per cent and the CPI-trim at 2.7 per cent in November. While BMO expects another cut at the central bank’s Jan. 29 meeting there have been some suggestions that there may be a pause in cuts.
Mortgage interest costs slowed for the 15th consecutive month. But rental prices grew at a faster yearly rate in November (7.7 per cent) compared with October (7.3 per cent), with Ontario, Manitoba and Nova Scotia hit hardest.
Gas prices also fell in November by 0.5 per cent, but had a smaller year-over-year decline due to a base-year effect which is the impact of comparing prices in a given month to the same month a year earlier. With gasoline excluded, overall inflation rose two per cent last month.
Black Friday deals contributed to lower prices last month, especially in household operations, furnishing and equipment and clothing and footwear, according to StatsCan.
The monthly decline for children’s clothing is the largest one ever recorded in November, the agency said. According to CIBC senior economist Andrew Grantham, it will remain difficult to identify underlying trends in inflation over the coming months. He also added that the December figures will be weakened by the beginning of a GST holiday in the middle of the month.
When the tax is reinstated in mid-February, inflation figures will see a temporary boost, he added. The Bank of Canada’s preferred core measures of inflation likely won’t feel as much of an impact. Grantham went on to add that inflation will see a temporary rise when GST is reinstated in the middle of February, skewing overall statistics. However, he said the impact of the GST holiday will be less pronounced on the Bank of Canada’s core inflation metrics.
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