Statistics Canada says the annual pace of inflation held steady in November as the consumer price index rose 4.7 per cent compared with a year ago.The result matched the year-over-year increase in October, which was the largest year-over-year gain for the consumer price index since February 2003.
A key driver of inflation in November was once again the price of gasoline, which rose 43.6 per cent compared with the same month a year earlier, slightly above October’s year-over-year rise of 41.7 per cent.
The annual rate of inflation in November would have been 3.6 per cent if gasoline prices had been excluded, the same as in October.
Also fuelling gains in the consumer price index last month were increases in furniture and food prices. Food prices rose 4.7 per cent in November compared with the same month a year ago for the largest increase since January 2015 when prices went up by 5.4 per cent, the agency reported.
November marked eight straight months that headline Inflation has come in above the Bank of Canada’s target range of between one and three per cent, which has not been seen since a similar run ended in December 1991.
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Stephen Tapp, chief economist with the Canadian Chamber of Commerce, says high inflation isn’t just hitting consumers hard, but is also driving up costs for businesses as the economy struggles with labour shortages, supply chain disruptions, and renewed uncertainty due to the latest rise in COVID cases.
“In the near-term, profitability will be squeezed, and if businesses pass cost increases onto their consumers it’ll prolong pressures,” he said.
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The average of the three measures for core inflation, which are considered better gauges of underlying price pressures and closely tracked by the Bank of Canada, was 2.73 per cent for November, up slightly from October, Statistics Canada said. The average was last that high was November 2008.
In a sign the economy is moving beyond the shock of COVID-19, Statistics Canada also announced the November inflation reading is the first without special consideration for certain goods and services that were unavailable because of the pandemic.
The agency also noted that the data is largely unaffected by November flooding in British Columbia because the majority of prices were collected before it occurred.
The Bank of Canada and federal government renewed their inflation targeting agreement this week.
They agreed to keep the inflation target in the one-to-three-per-cent range, but decided the central bank will also more formally keep close tabs on the labour market when making its
interest rate decisions.