12/20/2011 07:21 EST | Updated 02/19/2012 05:12 EST

Inflation in November holds steady at 2.9%

Higher prices for food helped keep Canada's annual rate of inflation at 2.9 per cent in November, matching October's rise, Statistics Canada said Tuesday.

Last month's overall inflation figure matched the expectations of economists.

Overall, Statistics Canada said prices rose in all eight major components it tracks and in every province in Canada. The inflation rate has been above the Bank of Canada's two per cent target for more than a year now.

Statistics Canada said that while the 12-month change in gasoline prices continued to ease, the year-over-year increase in food prices remained high.

Gasoline prices rose 13.5 per cent in the 12 months to November, after advancing 18.2 per cent in October. The increase in November was the smallest year-over-year gain since the beginning of 2011.

Meanwhile, consumers paid 4.8 per cent more for food in the 12 months to November, the largest increase since July 2009. The November gain follows a 4.3 per cent increase in October.

N.L. has largest increase

Shelter costs rose by 1.5 per cent, driven by increases in fuel oil, homeowners' replacement costs and electricity. Conversely, mortgage interest costs decreased 1.1 per cent for the 12-month period, after falling 1.3 per cent year-over-year in October.

Clothing prices fell 3.1 per cent on a monthly basis, while furniture sales were flat. That suggests retailers started to discount typical holiday gifts early to try to match the sales in the U.S. due to the Thanksgiving holiday, Scotiabank economists Derek Holt and Karen Cordes Woods said in a research note.

The closely watched Bank of Canada core index rose 2.1 per cent for the year to November, following a similar gain in October.

The core index strips out volatile food and energy prices, and is the baseline the Bank of Canada pays closer attention to in making its interest rate decisions.

Prices in Newfoundland and Labrador rose 4.1 per cent in the 12 months to November — the largest increase among the provinces.

Consumers paid 13.6 per cent more year-over-year for gasoline, while the price of fuel oil advanced 24.9 per cent.