Canadian Manufacturing

Statistics Canada says annual pace of inflation climbs to 2.2%

The increase in inflation came as energy prices in November climbed 1.5% compared with a year ago compared with a decline of 2.9% in October

December 18, 2019  The Canadian Press

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% compared with a year ago to end a three-month streak where the annual pace of inflation had held steady at 1.9%.

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% compared with a year ago compared with a decline of 2.9% in October.

Gasoline prices were up 0.9% year-over-year compared with a drop 6.7% in October.

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Canadians also saw the price for meat rise 5.2% compared with a year ago, the fifth month of increases at or above 4.0%. The cost of fresh or frozen beef was up 6.2%, while ham and bacon prices rose 9.1%. Fresh or frozen pork was up 0.7%.

Regionally, prices on a year-over-year basis rose more in November in every province except British Columbia.

Excluding gasoline, the consumer price index was up 2.3% compared with a year ago, matching the increase in October.

The overall increase in prices 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.

The average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures, was 2.17% compared with a revised figure of 2.10% for October.

The core readings are closely monitored by the Bank of Canada, which adjusts its key interest rate target to manage inflation.

The central bank, which targets annual inflation of 2%, has kept its key interest rate on hold at 1.75% for more than a year.