Canada's main gauge of cost pressures fell in November, suggesting the Bank of Canada's relentless campaign of interest-rate increases is starting to bite.
The consumer price index increased 6.8 per cent in November, down from a 6.9 per cent increase in September and October, as the cost of gasoline and furniture fell.
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According to Statistics Canada, grocery prices, rent and mortgage costs continued to exert the most upward pressure on the cost of living. Core inflation, which excludes volatile prices, was at five per cent, little changed from the month before.
The governor of the Bank of Canada insists that he will hit the two per cent target no matter what. The combination of lower commodity prices, a more fluid supply of goods and an unprecedented spike in policy interest rates suggest that the most dangerous burst of inflation since the early 1980s is nearing an end.
Macklem said that the headline has come down a bit. The governor said that various inflation measures will remain uncomfortably high for a few months, but that the cumulative effect of our interest rates will really start to work. That will be comforting if we begin to see that.
There will be more to come.
Kevin Carmichael can be reached via email at kcarmichael@postmedia.
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