Canada Inflation Steady at 2.2% as Core Measures Decelerate

Shoppers on Sainte-Catherine Street in Montreal. Photo by Andrej Ivanov /BloombergArticle content(Bloomberg) — Inflation in Canada held steady last month while core measures broadly cooled, as slowing price growth for services was offset by rising costs for goods.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentHeadline inflation rose at a 2.2% yearly pace in November, matching the pace in October, Statistics Canada data showed Monday. That was slower than the median expectation of 2.3% in a Bloomberg survey of economists.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentOn a monthly basis, the consumer price index rose by 0.1%, matching expectations.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThe Bank of Canada’s two so-called preferred core measures, the median and trim gauges, decelerated to a 2.8% annual pace, from 3% previously. On a three-month moving annualized basis, they slowed to 2.3%, from 2.6% in October.Article contentThe central bank has, in recent months, placed less emphasis on these two metrics and instead said a broad range of measures points to underlying inflation of about 2.5%.Article contentCore price pressures generally cooled or held steady in November. Excluding food and energy, prices rose 2.4% from a year earlier, down from 2.7% in October. Inflation excluding gasoline prices rose at a 2.6% pace for the third straight month. And the bank’s previous measure of core inflation — CPI excluding eight volatile components and indirect taxes — held at 2.9%.Article contentStill, the breadth of inflationary pressures widened, with about 42% of items in the consumer price index rising above a 3% yearly pace, from 34% previously.Article contentAltogether, the report shows headline inflation trending down toward the central bank’s 2% target, even as some measures of underlying inflation remain closer to 3%. The Bank of Canada is likely to be unfazed by ongoing core pressures, as it sees continued slack in the Canadian economy as US tariffs batter key sectors and weigh on business investment and consumer spending.Article contentArticle contentThe central bank held its policy rate steady at 2.25% last week and reiterated it sees borrowing costs at “about the right level” to support growth while keeping inflation contained.

Governor Tiff Macklem set the bar relatively high for a move off the sidelines, saying the bank will respond if there is “a new shock or an accumulation of evidence” that “materially changes the outlook.”Article contentPolicymakers expect inflation to remain close to the 2% target, around where it’s been for more than a year.Article contentIn November, lower prices for travel tours and accommodation, as well as slower growth in rent prices, put downward pressure on headline inflation. Higher costs of groceries, as well as a smaller decline in gasoline prices, were the main upside contributors.Article contentLower travel prices were driven partly by a base-year effect, as Taylor Swift performed in Toronto in November 2024.Article contentGrocery prices rose 4.7% in November, the largest increase since December 2023, as the cost of fresh fruit jumped and prices for beef and coffee continued to be significant contributors.Article contentPrices rose at a faster pace in five provinces, led by New Brunswick.Article contentThe report is the first of two inflation releases before the central bank’s next rate decision on Jan. 28. Traders expect the bank to hold rates steady until at least October 2026, when they see a possible hike.Article content—With assistance from Mario Baker Ramirez.Article contentTrending Garry Marr: How raiding your TFSA before the end of year could save you thousands Personal Finance The Federal Reserve’s rate cut was a clear signal to investors Investor 'Why let one person in the States change your life?' For Canadian snowbirds, the stay or go dilemma gets complicated Real Estate Subscriber only. 'A difficult job, but we'll get there': How Immigration Minister Lena Diab is pushing for balance on one of Ottawa's most delicate files Subscriber only News Canada's Air Force buys six Bombardier jets for $753 million News Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Garry Marr: How raiding your TFSA before the end of year could save you thousands Personal Finance The Federal Reserve’s rate cut was a clear signal to investors Investor 'Why let one person in the States change your life?' For Canadian snowbirds, the stay or go dilemma gets complicated Real Estate Subscriber only. 'A difficult job, but we'll get there': How Immigration Minister Lena Diab is pushing for balance on one of Ottawa's most delicate files Subscriber only News Canada's Air Force buys six Bombardier jets for $753 million News