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January 20, 2017ANALYSIS OF NOVA SCOTIA'S CPI DECEMBER AND ANNUAL 2016 ANNUAL CONSUMER PRICE INDEX 2016
Nova Scotia's annual average inflation of consumer prices was 1.2 per cent in 2016 following a rate of 0.4 per cent in 2015. This was just below the national average inflation of 1.4 per cent in 2016.
Newfoundland and Labrador (+2.7 per cent) and New Brunswick (+2.2 per cent) had the highest annual average inflation in Canada in 2016, partly reflecting increases to the provincial component of their Harmonized Sales Tax (HST) in July. In Prince Edward Island, the provincial component of the HST increased in October. Seven provinces posted larger annual average increases in consumer prices in 2016 than in 2015.
In Halifax, average annual consumer price inflation was 1.2 per cent.
Nova Scotia's annual average consumer price inflation for 2016 excluding food and energy rose 1.9 per cent, the same as the national rate.
In Nova Scotia 2016, prices were up in six of the eight major components, with decreases in shelter and clothing and footwear. In Canada, prices increased in all major components except clothing and footwear.
The continued decline in energy prices from their high levels in 2014 have weighed on overall price growth in 2016 in Nova Scotia and in Canada, as well as slowing inflation in food prices.
Annual average food price inflation across Canada in 2016 was down from the previous year. Nova Scotia's food price inflation averaged 2.4 per cent in 2016, down from 4.5 per cent in 2015. Nationally, food prices were up 1.5 per cent in 2016, down from growth of 3.7 per cent in 2015.
Annual average energy price inflation was down in all provinces except Newfoundland and Labrador in 2016. Nova Scotia's energy prices fell 6.0 per cent in 2016 following a drop of 13.5 per cent in 2015. Canada's average energy prices fell 3.0 per cent in 2016 following a drop of 9.6 per cent in 2015.
Annual average shelter prices were down 0.2 per cent in Nova Scotia in 2016 following a 1.0 per cent decline in 2015. Nationally shelter prices increased 1.6 per cent. Shelter prices declined in three provinces including Nova Scotia in 2016. The highest increase was in Ontario (+2.7 per cent).
MONTHLY CONSUMER PRICE INDEX DECEMBER 2016
In Nova Scotia December 2016, annual inflation of consumer prices (year-over-year growth) was 1.3 per cent, below the national average of 1.5 per cent. Monthly consumer prices were down 0.2 per cent nationally as well as in Nova Scotia
Within Atlantic Canada, Newfoundland and Labrador (+4.1 per cent), New Brunswick (+2.3 per cent) and had higher annual inflation compared with Nova Scotia and Prince Edward Island (both +1.3 per cent). On July 1, 2016, the provincial component of the harmonized sales tax (HST) increased in both Newfoundland and Labrador and New Brunswick. In Prince Edward Island, the provincial component of the HST was increased effective October 1, 2016.
Inflation was positive for all other provinces. Ontario had the highest inflation at (+2.0 per cent).
Nova Scotia's annual consumer price inflation (year over year growth in CPI) excluding food and energy rose 1.7 per cent, below the national rate of 1.8 per cent. Price level gains for this index were largest in Newfoundland and Labrador (+3.9 per cent) and New Brunswick (+2.9 per cent) and lowest in Quebec (+0.8 per cent). On a monthly basis, Nova Scotia's index excluding food and energy declined 0.4 per cent.
The main contributors to the monthly (Dec 2016 vs. Nov 2016) NS CPI movement:
- Gasoline (+2.6 per cent)
- Purchase and leasing of passenger vehicles (+0.6 per cent)
- Women’s clothing (-7.3 per cent)
- Men’s clothing (-9.9 per cent)
The main contributors to the annual (Dec 2016 vs. Dec 2015) NS CPI movement:
- Gasoline (+9.1 per cent)
- Purchase and leasing of passenger vehicles (+2.6 per cent)
- Fresh vegetables (-15.5 per cent)
- Non-alcoholic beverages (-13.0 per cent)
The CPI for food (year over year) in Nova Scotia declined 2.1 per cent with a 0.5 per cent decrease month over month. CPI for food (year over year) declined in all provinces, with the largest decline in Prince Edward Island. Nationally, the annual food prices declined 1.3 per cent.
The Nova Scotia energy index increased by 3.7 per cent compared to a year ago. Energy prices increased in all provinces compared to December 2015. Energy prices saw the largest increase in Newfoundland and Labrador (+12.7 per cent).
Major Components
The following table shows the price increases specific to Nova Scotia for the major components of the CPI this month:
Long Run Trends
The All-Items CPI annual inflation rate for Nova Scotia was higher than Canada's in December 2016. Since June 2014, Nova Scotia's annual inflation has been below the Canadian average except for three months: January, September and November 2016. While month to month movements in the indices can be different, over time they generally follow the same overall trend.
Annual inflation for the CPI excluding food and energy was lower in Nova Scotia (+1.7 per cent) than in Canada (+1.8 per cent).
Bank of Canada's preferred measures of core inflation
Compared with December 2015, CPI-Common rose 1.4 per, CPI-Median rose 2.0 per cent, and CPI-Trim rose 1.6 per cent in Canada. All-items CPI excluding eight of the most volatile components as defined by the Bank of Canada and excluding the effect of changes in indirect taxes (formerly referred to as CPIX) rose 1.6 per cent year over year in December 2016.
Statistics Canada Note: Since 2001, the Bank of Canada's main measure of core inflation has been "core" consumer price index (CPIX) inflation, which excludes eight of the most volatile components of the CPI and adjusts the remainder for the effect of changes in indirect taxes. Following a review of a wide selection of measures of core inflation in 2015, in the context of its most recent renewal of the inflation-control target, the Bank chose three preferred measures of core inflation: (i) a measure based on a trimmed mean (CPI-trim); (ii) a measure based on the weighted median (CPI-median); (iii) a measure based on the common component (CPI-common)
A new CANSIM table (326-0023), "Consumer Price Index (CPI) statistics, measures of core inflation – Bank of Canada definitions," displays the results of the following measures: CPI-common (common component), CPI-median (weighted median), and CPI-trim (trimmed mean).
The existing measure of core inflation continues to be produced and published by Statistics Canada, but is no longer referred to as the Bank of Canada's core index (CPIX). Instead, it is called the "Consumer Price Index (CPI), all-items excluding eight of the most volatile components as defined by the Bank of Canada and excluding the effect of changes in indirect taxes."
For more information see The Daily.
Appendix Tables
Source: Statistics Canada CANSIM Tables 326-0020 , 326-0021, 326-0023
Statistics Canada Note: Every two years, the expenditure weights for the basket of goods and services used in the calculation of the CPI are updated based on new estimates from the Survey of Household Spending (SHS). On February 24, 2017, with the release of the January 2017 CPI, these expenditure weights will be updated with the 2015 SHS. This new weighting pattern will replace the current expenditure weights, which are based on the 2013 SHS.