Canada's inflation rate cools more than expected

financialpost.com:

Canada’s inflation rate slowed to 1.9 per cent in November, slightly below forecast and down from two per cent in October, a deceleration that economists said should give the Bank of Canada room to continue to ease its policy rate.

Statistics Canada said on Tuesday the November slowdown was driven by a drop in prices for all eight major components in the consumer price index basket.

Inflation has now remained either at or below the Bank of Canada’s two per cent target since August.

“These metrics allow the Bank of Canada to sustain its easing stance even if it starts to go in 25 (as opposed to 50) basis-point increments,” said David Rosenberg, founder and president at Rosenberg Research & Associates Inc., in a note to clients.

Shelter cost growth slowed to 4.6 per cent in November as a result of the 15th consecutive month of declining mortgage costs, while rent price growth remained strong at 7.7 per cent. Overall, shelter prices have increased by 18.9 per cent compared to three years ago.

The cost of food purchased in stores rose 2.6 per cent year-over-year in November, after rising 2.7 per cent the month before. Gasoline prices were down by 0.5 per cent, a slower deceleration than the four per cent decline the previous month.

Black Friday sales also contributed to lower prices during the month, with prices of household items dropping by 0.9 per cent. Additionally, costs of travel tours fell by 12 per cent in November.

Core inflation, the measures the Bank of Canada prefers to look at when making its monetary policy decisions, remained above the two per cent target last month. CPI-trim rose by 2.7 per cent and CPI-median came in at 2.6 per cent in November, the same as the month before. CPI-common rose by two per cent,