Our Senior Economist Andrew DiCapua analyzes the key takeaways of the Consumer Price Index (CPI) report for December 2023.

If we’ve learned anything over the past few months, it’s that the last mile of the race against inflation is the hardest and the longest. December marked the second consecutive month where inflation moved in the wrong direction, with essential components like food and shelter still above 5%.

In the Bank of Canada’s fourth quarter consumer and business surveys, one-year inflation expectations remain too high with consumers still believing inflation will be more than double target. Despite progress, unanchored inflation expectations will take time to adjust, keeping the Bank in a tough position in the start of 2024. Long story short – even if the hard data show progress, the Bank will have to battle the perception of inflation at risk of tilting the economy into recession.

Andrew DiCapua, Senior Economist, Canadian Chamber of Commerce

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