Canada's Inflation Drops in November


Consumer prices rose 2.0% in the 12 months to November, following a 2.4% increase in October. The 0.4 percentage point decrease can be largely attributed to a slowdown in the growth rate of energy and food prices, and a decline in clothing prices.

Energy prices rose 6.7% during the 12 months to November, on the heels of a 9.1% increase in October. Prices at the pump were 7.2% higher than a year earlier, following an 8.8% increase the previous month. Electricity prices increased 5.9% compared with an 8.1% advance in October.

Prices for the purchase of passenger vehicles rose 3.9% compared with November 2009. This follows a 4.9% increase in October.

Homeowners' replacement cost increased 4.6% in November compared with a 4.9% advance the previous month.

On a seasonally adjusted monthly basis, consumer prices rose 0.2% in November, after increasing 0.7% in October. The transportation index advanced 1.8%, while the household operations, furnishings and equipment index rose 0.3%. However, the shelter index decreased 0.2% while the food index fell 0.3%.

Prices increased in seven of the eight major components of the Consumer Price Index in the 12 months to November; the only exception was clothing and footwear.

Shelter costs rose 2.6% in November, following a 2.8% rise in October. In addition to higher electricity prices and homeowners' replacement cost, tenants paid 1.2% more in rent, while homeowners paid 5.4% more for home and mortgage insurance.

However, the mortgage interest cost index, which measures the change in the interest portion of payments on outstanding mortgage debt, declined 2.7% after falling 3.0% in October.

Food prices rose 1.5%, following a 2.2% increase in October. Consumers paid 2.5% more for food purchased from restaurants. Prices for fresh vegetables fell 4.4% in November after increasing 5.5% in October.

The health and personal care index increased 2.2% in November after advancing 2.7% the previous month.

Prices for household operations, furnishings and equipment advanced 0.9%, on the heels of a 1.3% increase in October. Consumer prices for telephone services rose 1.7%.

Alcoholic beverages and tobacco products prices increased 2.5%. Consumers paid 5.0% more for cigarettes.

Clothing and footwear prices declined 3.2% in November compared with a 0.1% decrease in October. Prices for women's clothing fell 6.9% in November after declining 2.1% the month before. Prices also fell for children's and men's clothing.


TradingEconomics.com, Statistics Canada
12/21/2010 6:33:53 PM