Canadian prices, as measured by the Consumer Price Index (CPI), rose 6.8 per cent on a year-over-year basis in November, a slight decrease from the 6.9 per cent rate in October. Despite rising food and shelter costs, falling gasoline and furniture prices softened the pressure on prices. Rising interest rates contributed to an increase in mortgage interest costs, which were up 14.5 per cent year-over-year as Canadians renewed or initiated higher-rate mortgages. Month-over-month, on a seasonally-adjusted basis, prices were up 0.4 per cent in November, down from 0.6 per cent in October. In BC, consumer prices rose 7.2 per cent year-over-year, down from 7.8 per cent last month. Average hourly wages grew 5.6 per cent year-over-year in November, indicating a decline in purchasing power.
November's CPI numbers were lower than October, but this was largely driven by volatile gasoline prices and base-year effects in furniture prices. Food and shelter costs continued to rise strongly in November and the Bank's preferred measures of core inflation, which strip out volatile components, ticked up in November. Overall, inflation remains well above the Bank of Canada's 2 per cent target and we will need to see more positive news in core inflation over the next several months before the Bank changes direction on interest rates.
For more information, please contact: Gino Pezzani.