Canada’s inflation continued decelerating in November 2024, marking a noticeable slowdown in consumer price growth across various sectors. The Consumer Price Index (CPI) increased by 1.9% year-over-year, down slightly from the 2.0% rise in October.
Despite the easing of inflation, certain costs remained stubbornly high. Grocery prices continued their upward trend, rising 2.6% in November from the previous year. Although this was a slight slowdown from October’s 2.7% increase, the year-over-year rise remains a burden for Canadian consumers. Over the past two years, grocery prices have surged by an eye-popping 19.6%, further highlighting the financial strain for many households. In addition, shelter costs were still up by 18.9% compared to the same month in 2021, underscoring the persistent challenge of affordability in Canada’s housing market.
A broader view of November’s CPI report reveals that price growth across other sectors also slowed. Travel services, for instance, saw a reduced rate of decline, with prices for travel tours falling by 6.7%, compared to a larger 7.1% drop in October. Similarly, the mortgage interest cost index grew at a slower pace, rising 13.2% in November, marking the 15th consecutive month of deceleration.
The food sector saw minimal relief. Despite a slight decrease in the growth, the 2.6% annual increase in food prices underscores the continuing strain on grocery budgets. The price of essential goods such as dairy, meats, and produce has contributed significantly to rising household expenses, particularly for lower-income Canadians who are most sensitive to changes in food prices.
On the positive side, November’s CPI also revealed some encouraging trends. The rent market, which had been one of the most significant contributors to overall inflation, showed signs of moderation. The year-over-year rent increase was 7.7%, a slight acceleration from October’s 7.3%, but still lower than the peak increases seen in recent years. Ontario, Manitoba, and Nova Scotia experienced some of the sharpest rent hikes, with Ontario seeing a notable 7.4% increase.
The shelter component, which includes rent and mortgage costs, grew by 4.6% year-over-year, a deceleration from October’s 4.8%. However, rent prices continued to apply upward pressure on the overall CPI, while mortgage interest costs provided some relief by moderating for the 15th consecutive month.
In terms of monthly changes, the CPI remained largely unchanged in November, following a 0.4% increase in October. When adjusted for seasonal changes, the CPI showed a modest increase of 0.1%. One of the key factors contributing to the monthly stability was the Black Friday sales and related discounts, which helped to lower prices in various categories such as household goods, clothing, and footwear.
Notably, prices for cellular services dropped by 6.1%, contributing to a 0.9% decline in the household operations, furnishings, and equipment index. Additionally, the clothing and footwear index saw a decrease of 0.8%, with children’s clothing prices experiencing a significant 4.9% drop, marking the largest monthly decline for this category in November.
Fuel prices, which have been a focal point in previous months, also experienced a shift. Gasoline prices fell by 0.5% on a year-over-year basis in November, a smaller decline compared to the 4.0% drop in October. On a monthly basis, gasoline prices remained flat, with no change recorded in November.
In terms of the travel sector, November’s report showed that prices for traveller accommodation rose sharply by 8.7%, driven in large part by the booming tourism industry in Ontario, where hotel prices jumped by an extraordinary 23.7%. The increase in travel accommodation prices coincided with the scheduling of high-profile events like concerts, which contributed to the demand surge.
While the inflationary pressure on Canadians’ wallets is slowly easing, it remains clear that grocery prices, shelter costs, and some travel-related expenses are still pushing costs upward. As 2024 draws to a close, Canadians are left grappling with ongoing affordability challenges, particularly in the housing market and essential goods. The question now remains whether this trend of slowing inflation will be sustained in the coming months, or if further cost increases will persist in the face of economic uncertainties.