Canadian inflation continues to remain elevated in November - Yahoo Canada Finance

Cashier at a grocery store in Toronto, Ontario, Canada where food prices are up 4.4 per cent year-over-year (Photo by Creative Touch Imaging Ltd./NurPhoto via Getty Images)

Statistics Canada says the Consumer Price Index (CPI) rose 4.7 per cent year-over-year. That was in line with estimates and matched the increase in October, which was the highest since February 2003.

Supply chain disruptions continued to push prices higher for durable goods, such as passenger vehicles and furniture.

According to Statistics Canada, prices were up across all eight sectors, with transportation and shelter prices contributing the most to the increase in the CPI.

Consumers paid more for gasoline (+43.6 per cent), furniture (+8.7 per cent) and food (+4.4 per cent).

BMO chief economist Doug Porter notes that Canadian inflation is now towards the lower end of the G7 and the fact that things didn't get worse is welcome news.

"While this release alone may not advance the case for rate hikes, the bigger picture continues to do so—loudly," said Porter.

Not making enough money to keep up with inflation

The most recent Labour Force Survey found that wages rose 2.8 per cent during the same period. With prices rising faster on average than wages, purchasing power has been eroded.

Canadian Chamber of Commerce chief economist Stephen Tapp says consumers aren't the only ones facing higher costs.

Inflation was up 0.2 per cent in November month-over-month, following a 0.7 per cent increase in October. renewed uncertainty due to the latest rise in COVID cases. In the near term, profitability will be squeezed, and if businesses pass cost increases onto their consumers, it'll prolong pressures on (expected) inflation and wages," said Tapp.

"For small businesses carrying elevated debt from the lockdowns, the higher interest rates that lie ahead will make it harder to service their debt."

Inflation was up 0.2 per cent in November month-over-month, following a 0.7 per cent increase in October.

The inflation data comes the same week the Bank of Canada's mandate was renewed to target inflation at 2 per cent with flexibility as conditions warrant.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

Download the Yahoo Finance app, available for Apple and Android.

Adblock test (Why?)

Canadian inflation continues to remain elevated in November - Yahoo Canada Finance
Read More