Canada: Inflation accelerates to a six-month high in November
December 18, 2019
Consumer prices increased 0.2% on a seasonally-adjusted basis from a month earlier in November, softer than October’s 0.3% uptick in November. According to Statistics Canada, higher prices for transportation, and alcoholic beverages, tobacco products and recreational cannabis drove the uptick in November.
Inflation was jumped to 2.2% in November, the highest in six months and up from 1.9% in October. November’s reading met market analysts’ expectations and climbed above of the 2.0% midpoint of the Central Bank’s target range of 1.0% to 3.0%. Meanwhile, annual average inflation was steady at 1.9% in November.
Commenting on November’s print, James Marple, a senior economist at TD Economics, noted:
“The Bank of Canada has noted how close inflation is to its target in its deliberations on monetary policy. Still, it is more likely to respond to data on the real economy, especially the state of the job market, as it plots its next course of action in the New Year.”
Going forward, inflation should remain close to the Central bank’s target rate, supported by robust wage growth and the recently introduced carbon tax. That being said, developments in commodity prices remain a key risk to the inflation outlook.
Author: Steven Burke, Economist