Canada’s inflation rate stays at 18-year high of 4.7%

Inflation rates are spiking around the world Canada’s inflation rate remained at 4.7 per cent in November, matching the annual pace seen the previous month.

The data point released by Statistics Canada on Wednesday morning was in line with economist expectations, tying October’s level, which was the highest inflation rate since 2003. Inflation rates are soaring around the world right now, as the combination of record government spending, supply chain disruptions and a surge in demand for consumer goods has caused prices to rise quickly.

For comparison purposes, U.S. data last week showed that country’s inflation rate rose to an almost 40-year high of 6.8 per cent last month. Consumer prices are heading higher at their fastest pace in decades, and so far incomes aren’t keeping pace.

Statistics Canada data shows that while the cost of living has increased by almost five per cent in the past year, incomes have only risen by about half that, or 2.8 per cent.

Economist Tu Nguyen with consultancy RSM Canada said wages should start to catch up soon, though. “There is usually a time lag between inflation and wages, with the latter being stickier and taking longer to shift. However, with the tight labour market, and wages already increasing substantially for job hoppers, we will soon see rising wages to match inflation,” she said. The data agency says higher prices for gasoline, furniture and food were the biggest factors pushing up the annual consumer price index.

Gasoline prices rose by 43.6 per cent in the year up to November. Grocery prices, meanwhile, rose by 4.7 per cent. That’s the fastest pace of increase since January 2015.

We’ll all be paying a lot more for food next year, says Canada’s Food Price Report

Prices for furniture rose 8.7 per cent amid higher shipping costs. The data agency says the introduction of tariffs earlier this year may have contributed to the increase in prices for upholstered furniture, which were up by more than 11 per cent compared to what they were a year ago.