MNI: Canada Nov Core CPI Slows For 2nd Month; Headline Steady

Canadian core inflation slowed for a second month in November while headline prices were steady at 2.2%, figures coming days after the central bank said stable prices means it can keep borrowing costs at the low end of its neutral range to support an economy hit by U.S. tariffs.

Statistics Canada's report Monday showed the "trim" and "median" core indexes both slowed to 2.8% in November, from 3.0% in October and 3.1% in September. The trim index advance was the slowest since January and for the median it was the slowest since March. Headline CPI was also a tenth of a percentage point less than an MNI economist consensus for 2.3% as lower services costs offset gains in some food and shelter items.

Governor Tiff Macklem held the policy rate at 2.25% last Wednesday after two prior cuts and said his expanded definition of trend inflation is running at about 2.5%. Some investors see the Bank cutting again early next year with exports and investment weakened by tariffs, and others see the next move as a hike late next year as the economy re-balances. 

Other measures suggest trend inflation in line with the Bank's view. CPI excluding gasoline gained 2.6% for a third consecutive month, and inflation excluding food and energy rose 2.4%. The Bank has said headline inflation will be choppy in the near term reflecting a temporary federal tax holiday and the elimination of a carbon tax. 

Rents climbed 4.7% in November from a year earlier while meat prices were up 8.3%. The cost of travel tours declined 8.2% as fewer people visited the U.S., while home maintenance costs fell 1.6%. Hotel prices declined in November reflecting Taylor Swift's Toronto concerts a year ago. 

There was also mixed evidence on high profile items, with groceries rising the most since December 2023 at 4.7%. Gasoline prices fell 7.8% from a year earlier.