Canada: Headline Inflation Eases but Data Disappoints Under the Hood

Consumer prices climbed 0.4% in November to lower the annual rate of inflation to 6.8%. It was a somewhat disappointing release as early indicators had suggested a more significant slowdown in inflation. We continue to anticipate that the central bank will pause its hiking cycle in January, but this print keeps the door open for one more rate increase, and next month’s labour market print for December will be critical in assessing the future course of Canadian interest rates.