Canada inflation falls to 2% in November, C$ falls

Inflation in Canada in November fell to 2% (annualized) from October’s 2.4%, which was bang-on the Bank of Canada’s annual Consumer Price Index (CPI) target. The Canadian dollar weakened on the news, as traders concluded that the central bank will take its time in raising interest rates.

The lower CPI rise was mainly due to gasoline, which declined by 5.9% in price since November last year, after rising by 0.6% in October.

The gasoline price index (on a monthly basis) fell by 7.5% in November, marking its fifth successive monthly decline. Last month, gasoline prices in Canada were at their lowest in 45 months (since Feb 2011).

On a year-over-year basis, gasoline prices dropped in every province, with Prince Edward Island posting the biggest fall and British Columbia the smallest.

The shelter index increased by 2.3% in November compared to November 2013, following a 2.8% rise in October. Year-over-year, natural gas prices were 14.7% up, while food bought in stores rose 3.3%, driven mainly by meat which increased by 12.2%.

Food bought in restaurants increased by 2.5% in November year-over-year.

Canada CPI November 2014

Source: “Consumer Price Index, November 2014,” Statistics Canada.

After rising by 1.1% in October, transportation costs declined by 0.2% in November versus the same month last year. This was nearly completely due to cheaper gasoline.

Passenger vehicles were 1.3% up in November versus November 2014, after rising by 0.9% in October.

12-month inflation rate in the provinces

November inflation compared to October slowed down in nine provinces, with Newfoundland and Labrador and Prince Edward Island posting the sharpest CPI slowdown, followed by Alberta.

In British Columbia, prices increased at a faster rate in November than October, the only province to register an increase.

Newfoundland and Labrador CPI increased by 0.7 in November versus 1.8% in October, with gasoline and clothing slowing more than in the rest of the country.

Gasoline Prices

Source: Statistics Canada.

Prices in November in Prince Edward Island rose by 0.1%, after increasing by 1.2% in October. Gasoline prices declined by 8% in November, after rising by 1.8% in October.

Alberta’s CPI increased by 2% in November after rising by 3% in October. Natural gas prices rose by 1.8% in November and a whopping 30.7% in October. Electricity costs fell by 8.2% in November after jumping 2.2% in October.

British Columbia saw consumer prices go up by 1.2% in November after rising 1.1% in October. Gasoline prices declined by 1.5% and 0.9% in November and October respectively.