| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| CPI - M/M | 0.1% | 0.0% to 0.4% | 0.0% | 0.4% |
| CPI - Y/Y | 1.9% | 1.9% to 2.2% | 1.9% | 2.0% |
| Core CPI - M/M | -0.1% | 0.5% | ||
| Core CPI - Y/Y | 1.9% | 2.3% |
Highlights
Canada's Consumer Price Index was unchanged in November on a monthly basis, after a 0.4 percent increase in October, short of expectations for a 0.1 percent rise in the Econoday survey of forecasters.
Compared to November 2023, the CPI is up 1.9 percent, slowing down a bit from the 2 percent pace set in October, and matching expectations in the Econoday survey of forecasters.
Excluding food and energy prices, the CPI fell 0.1 percent on a monthly basis, compared to a 0.5 percent increase in October. Compared to a year ago, the core CPI is up 1.9 percent in November vs. a 2.3 percent increase in October.
The inflation data remains in line with the Bank of Canada's outlook for consumer prices, with the central bank expecting inflation to average close to its 2 percent target"over the next couple of years." This means a continuation of its plan to keep inflation"close to the middle" of the 1 percent to 3 percent range.
Compared to a year ago, gasoline prices fell 0.5 percent in November compared with October's decline of 4 percent. Consumer prices excluding gasoline rose 2 percent year over year last month, after rising by 2.2 percent in both October and September. On a monthly basis, gasoline prices are flat in November following a 0.7 percent rise in October.
There are pockets of sticky inflation. Shelter price growth continued to slow down in November, but remains elevated rising 4.6 percent year over year, compared with a 4.8 percent increase in October. Rent is up 7.7 percent from last year, speeding up from October's 7.3 percent rise. Grocery prices rose 2.6 percent from November 2023, following a 2.7 percent annual gain in October.
Prices for goods are unchanged from a year ago in November, following a mere 0.1 percent uptick in October. Meanwhile, prices for services jumped 3.5 percent in November.
The average of the Bank of Canada's 'Alternative measures' of annual core inflation for November is 2.7 percent.
Compared to November 2023, the CPI is up 1.9 percent, slowing down a bit from the 2 percent pace set in October, and matching expectations in the Econoday survey of forecasters.
Excluding food and energy prices, the CPI fell 0.1 percent on a monthly basis, compared to a 0.5 percent increase in October. Compared to a year ago, the core CPI is up 1.9 percent in November vs. a 2.3 percent increase in October.
The inflation data remains in line with the Bank of Canada's outlook for consumer prices, with the central bank expecting inflation to average close to its 2 percent target"over the next couple of years." This means a continuation of its plan to keep inflation"close to the middle" of the 1 percent to 3 percent range.
Compared to a year ago, gasoline prices fell 0.5 percent in November compared with October's decline of 4 percent. Consumer prices excluding gasoline rose 2 percent year over year last month, after rising by 2.2 percent in both October and September. On a monthly basis, gasoline prices are flat in November following a 0.7 percent rise in October.
There are pockets of sticky inflation. Shelter price growth continued to slow down in November, but remains elevated rising 4.6 percent year over year, compared with a 4.8 percent increase in October. Rent is up 7.7 percent from last year, speeding up from October's 7.3 percent rise. Grocery prices rose 2.6 percent from November 2023, following a 2.7 percent annual gain in October.
Prices for goods are unchanged from a year ago in November, following a mere 0.1 percent uptick in October. Meanwhile, prices for services jumped 3.5 percent in November.
The average of the Bank of Canada's 'Alternative measures' of annual core inflation for November is 2.7 percent.
Market Consensus Before Announcement
Annual CPI is expected to tick back down below the 2 percent midpoint of the Bank of Canada's target range as sluggish demand is weighing on inflation. The consensus sees 1.9 percent in November after picking up to 2.0 percent in October from a low-low 1.6 percent in September.
Definition
The Consumer Price Index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly and annual changes in the CPI provide widely used measures of inflation. The policy target measure for the Bank of Canada (BoC), the annual CPI rate can be distorted by swings in the more volatile subsectors so the central bank also monitors an adjusted measure of the CPI that excludes a range of volatile categories in order to get a better handle on underlying trends.
Description
The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. In countries such as Canada, where monetary policy decisions rest on the central bank's inflation target, the rate of inflation directly affects all interest rates charged to business and the consumer.
Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments.
Inflation (along with various risks) basically explains how interest rates are set on everything from your mortgage and auto loans to Treasury bills, notes and bonds. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
As the most important indicator of inflation the CPI is closely followed by the Bank of Canada. The Bank of Canada has an inflation target range of 1 percent to 3 percent but focuses on the 2 percent midpoint. It uses the CPI and three measures of the underlying rate as the prime inflation indicators. Markets also look at core rate which excludes food and energy.
Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments.
Inflation (along with various risks) basically explains how interest rates are set on everything from your mortgage and auto loans to Treasury bills, notes and bonds. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
As the most important indicator of inflation the CPI is closely followed by the Bank of Canada. The Bank of Canada has an inflation target range of 1 percent to 3 percent but focuses on the 2 percent midpoint. It uses the CPI and three measures of the underlying rate as the prime inflation indicators. Markets also look at core rate which excludes food and energy.
