Canada's October CPI Data Overstate The Inflation Picture, Says Rosenberg Research

09:48 AM EST, 11/20/2025 (MT Newswires) -- Rosenberg Research said it took a closer look at the Canadian consumer price index that was released on Monday for October and it has become clear that inflation shouldn't be an obstacle for more Bank of Canada rate cuts.

All the more so with the woeful October housing starts data, which raises the odds of another quarterly contraction in Q4, noted Rosenberg Research.

What masked a true price-stability picture was the bizarre 0.6% spike in residential rents (seasonally adjusted) for a second straight month, stated Rosenberg. The year-over-year growth trend in rents, according to Statistics Canada, is running at 5.2%.

There is absolutely no way in the real world that rents in Canada are accelerating this much, if at all, pointed out Rosenberg. Not with nationwide apartment vacancy rates doubling over the past 12 months to over 4.0% from 2.2% and asking rents actually having deflated by 2.2%, down across all bedroom types.

Strip rents out of the data and you see that the CPI (seasonally adjusted) rose by less than 0.1% month over month and is running at 1.9% year over year, fractionally below target.

If the more realistic -2.2% measure is included, inflation is actually little higher than a +1.5% year-over-year rate.

There's something else -- the improving dispersion within the CPI itself, added Rosenberg. The BoC's own weighted-median index eased in October to +2.9% year over year from +3.1%. Rosenberg's in-house work shows that less than half of the CPI is running above the 2.0% target, while only 17% is higher than a 3.0% inflation rate. Just half the index is running between +2.0% and +3.0% inflation.

Central bankers should probably never pat themselves on the back, but Governor Tiff Macklem and the BoC's Governing Council deserve some kudos, according to Rosenberg.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.