Canada Inflation Research Brief

Inflation ticks down, but remains elevated. The consumer price index climbed 6.8 per cent year-over-year in November, down 10 basis points when compared to October. While the inflation reading was higher than the general consensus of 6.7 per cent, mainly a result of surging rental fees, slowing price growth is still a positive outcome. Regarding core measures, which remove the largest price changes in individual components, the indicators were relatively unchanged. CPI-trim remained at 5.3 per cent, while CPI-median inched up 10 basis points to 5.0 per cent. The three-month annualized rate for these core measures, a key indicator for the Bank of Canada, did increase as well. Nonetheless, while annual inflation did not drop as much as anticipated, broad-based indicators for future price deceleration still exist. Gas prices continue to decline, consumer demand is softening and supply chain headwinds are mitigating. Future price growth, as a result, is still expected to trend down over the coming months.