Despite aggressively hiked-up interest rates meant to rein in inflation, Canada's inflation rate fell just 0.1% in November to its new year-over-year rate of 6.8%, Statistics Canada reported on Wednesday.
On a monthly basis, the Consumer Price Index (CPI), the most common measure of inflation, actually rose 0.1% in November. This follows the 0.7% month-over-month gain seen in October. And on a seasonally adjusted monthly basis, the CPI was up 0.4% Statistics Canada says.
Taking food and energy prices out of the CPI calculation, November's annual inflation rate sat at 5.4%, up slightly from the 5.3% seen in October. In fact, gasoline prices were down 3.6% month-over-month in November -- a sizable change from the 9.2% increase they saw in October. The November decline driven by price drops in Western Canada due to reopened refineries in the western US, Statistics Canada says.
Furniture price growth was also down, rising just 8.1% in November compared to the preceding eight consecutive months of increases above 12%. But this decline, combined with that of gas prices, was offset by faster growth in mortgage interest costs and rent, the report says.
As Canadians are well aware, food prices are up, now sitting 11.4% higher on an annual basis in November. Food prices also grew at a faster rate than has been seen on the all-items CPI every month since December 2021. Interestingly, non-alcoholic beverages, fresh fruit, and meat saw their prices grow at a noticeably faster rate than other items, jumping 19.4%, 11%, and 6.2%, respectively. But the biggest increase was seen in edible fats and oils, which ballooned 26%. Coffee and tea were up 16.8%, with eggs following closely at 16.7%.
Another unsurprising result: housing prices are rising at a faster pace, up 7.2% year-over-year in November. According to Statistics Canada, this is mainly due to upward pressure from both mortgage interest costs and inflated rent prices. Mortgage interest costs were up 14.5% year-over-year in November -- a noticeable change from the 11.4% seen in October. It also marked the largest increase seen in mortgage interest costs since February 1983. The jump was somewhat to be expected, though, following the 50-basis-point the Bank of Canada implemented at the end of October.
Rent prices were up 5.9% annually in November, building on the 4.7% increase from the month prior. "Among other factors, a higher interest rate environment, which may create barriers to homeownership, put upward pressure on the index," Statistics Canada said. "Rent prices accelerated the most in Prince Edward Island (+12.6%), British Columbia (+7.2%), Quebec (+5.3%) and Ontario (+7.1%)."
The extremely high price of cellular services in Canada has always been a hot topic, and those prices are continuing to grow. "Consumers paid 2.0% more compared with November 2021, when prices fell amid a series of industry-wide price promotions offering reduced prices for phone plans and bonus data," the report reads.