Canada’s inflation rate drops to 2.0% in November amid gas price fall

OTTAWA – A big drop in prices at the pump helped slow Canada’s annual inflation rate last month to 2.0 per cent, says Statistics Canada.

The statistical agency found prices rose in every major category of the consumer price index compared to a year earlier except for transportation – in large part due to the sharp fall in gasoline prices.

The agency’s November reading, released Friday, showed the national inflation rate was below economists’ expectations of 2.2 per cent following October’s reading of 2.4 per cent.

Gasoline prices were 5.9 per cent lower than a year earlier amid a global slide in world oil prices, StatsCan said. The agency’s gasoline price index fell 7.5 per cent in November – the fifth consecutive monthly decrease.

For specific goods, StatsCan found the biggest year-over-year price climbs in natural gas at 14.7 per cent, meat at 12.2 per cent and cigarettes at 11.4 per cent.

Aside from gasoline, some of the major contributors to price decreases were travel tours at 10 per cent, video equipment at 9.3 per cent, digital computing equipment and devices at 4.2 per cent.

On a seasonally adjusted monthly-to-month basis, the agency said prices overall fell 0.2 per cent from November, after rising 0.1 per cent in October. The decline was in line with analyst estimates compiled by Thomson Reuters.

Consumer prices for November increased at a slower pace in every province compared to the previous year except for British Columbia, where inflation sped up slightly to 1.2 per cent from 1.1 per cent in October.

Core inflation, which excludes some volatile items such as gasoline, also slowed in November to 2.1 per cent after a 2.3 per cent increase in October. The agency said the core rate was pushed down by lower prices in the categories of clothing and footwear as well as recreation, education and reading.

A consensus of economists had predicted the November reading for core inflation would rise 2.4 per cent.

Statistics Canada also released October’s numbers for retail trade, which held at $42.8 billion.

The agency said lower sales in the categories of motor vehicle and parts dealers as well as gasoline stations were offset by higher sales in most of the other areas.