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The national inflation reading for November was weaker than October’s rate of 1.5 per cent, the federal agency’s latest consumer price index found. A consensus of economists had predicted 1.4-per-cent inflation for November, according to Thomson Reuters.
Taken together, the fresh numbers for retail sales and inflation should be seen as a positive, said CIBC chief economist Avery Shenfeld.
“This was a bit of a Christmas present for the Canadian economy in the sense that we had some heat in retail activity, but the tame readings on inflation will allow the Bank of Canada to stay with very low interest rates that’s helping spur some of the consumption spending,” Shenfeld said in an interview.
The Statistics Canada report said lower prices for fresh produce, meat and travel tours compared to a year earlier helped pull down the overall inflation rate. The cost of lettuce fell 18.7 per cent, tomatoes dropped 11 per cent and travel tours declined 4.2 per cent.
The federal agency said higher costs for items like automobiles, homeowners’ insurance and electricity helped contribute to the upward forces behind the overall rate. Home and mortgage insurance was up 4.4 per cent compared to the year before, while the cost of purchasing and leasing vehicles rose 3 per cent and electricity bills climbed 3.5 per cent.
On retail trade, Statistics Canada said total sales eclipsed the $ 45-billion mark in October.
National Bank senior economist Krishen Rangasamy wrote in a research note to clients that he was particularly encouraged by data that showed a continued rise in discretionary spending. This means, he added, purchases other than groceries, gasoline and personal-care items.
The change, announced in October, was made in an effort to manage the risks associated with the shortcomings of having just one indicator.
The three new indicators — known as CPI-common, CPI-median and CPI-trim — all showed weaker year-over-year inflation for November than their readings for October. CPI-common had a reading last month of 1.3 per cent, CPI-median had 1.9 per cent and CPI-trim had 1.6 per cent.