Inflation appears to be receding faster in the U.S. than it is in Canada, and a TD economist says that’s because of different central bank mandates and methodology between the two countries.

On Friday, the U.S. government reported year-over-year inflation of 2.6 per cent for December, while Statistics Canada reported last week that Canada’s core inflation climbed to 3.4 per cent that same month.

Beata Caranci, chief economist at TD Bank, said one reason the U.S. appears to have tamed inflation more effectively than Canada is because data is calculated differently in each country.

In the U.S., shelter costs amount to 15 per cent of the core goods calculation. In Canada, shelter represents 30 per cent of that calculation, which will make it harder for Canada to reach its goal of bringing inflation down to two per cent, she said.

“They're both rising at about six per cent, but it's double the weight in terms of Canada and how much it's captured,” Caranci told BNN Bloomberg in a Friday interview.

“It's going to make it a lot harder for the Bank of Canada to hit the number they want to hit when you have an aspect of your methodology that's heavily tied to a segment of the economy that they have very little control over right now.”

Other factors outside the central bank’s control, including tensions in the Middle East, are also making it harder to achieve the central banks’ goal, Caranci added.

Differing mandates between the central banks are also playing a role, Caranci added, as the Bank of Canada has a more singular mandate of maintaining inflation, but the Fed has a dual mandate of controlling inflation and maintaining balance in the job market.

“That's why we continue to see (the Bank of Canada) and hear them talk tough on inflation,” she said. “The numbers are better than I think is being communicated perhaps by the Bank of Canada, because they want to make sure they're anchoring expectations.”

With files from Bloomberg News