Gas prices pump up annual pace of inflation in November: Statcan
OTTAWA The annual pace of inflation heated up in November as gasoline prices posted their first year-over-year increase since October 2018, Statistics Canada said Wednesday.
The agency said the consumer price index rose 2.2 per cent compared with a year ago to end a three-month streak where the annual pace of inflation had held steady at 1.9 per cent.
The increase in the pace of inflation compared with October came as energy prices in November posted their first year-over-year increase since April. Energy prices climbed 1.5 per cent compared with a year ago, in contrast to a decline of 2.9 per cent in October.
Gasoline prices were up 0.9 per cent year-over-year compared with a drop 6.7 per cent in October.
Royal Bank senior economist Josh Nye said oil prices were down in November last year.
“The fact that wasn’t repeated this November means energy price growth is back into positive territory,” he said, noting that inflation will likely remain above two per cent in the short term due to the lower gasoline prices a year ago.
However, Nye said the underlying inflation trends appear to be firming with the average of the core measures of inflation at their strongest pace in a decade.
Excluding gasoline, which had been weighing on overall inflation in recent months, the consumer price index was up 2.3 per cent compared with a year ago, matching the increase in October.
And, the average of Canada’s three measures for core inflation, closely watched by the Bank of Canada, was 2.17 per cent compared with a revised figure of 2.1 per cent for October.
CIBC senior economist Royce Mendes said the BOC won’t be too concerned with headline inflation rising above two per cent for a few months, given that it’s largely the result of base effects. “However, if the core measures accelerate further, monetary policy-makers could start to take more notice of consumer prices, something they haven’t had to do given that inflation has been so consistently around the central bank’s target recently,” Mendes wrote in a report.
The overall increase in prices of 2.2 per cent compared with a year ago was driven by increased mortgage interest costs, passenger vehicles and auto insurance premiums. The increases were partly offset by lower prices for telephone services, internet access and traveller accommodation.
Canadians also saw the price for meat rise 5.2 per cent compared with a year ago, the fifth month of increases at or above four per cent.