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October 16, 2019ANALYSIS OF NOVA SCOTIA'S CONSUMER PRICE INDEX FOR SEPTEMBER 2019 TRENDS - SEPTEMBER 2019
In Nova Scotia September 2019, year over year growth for the All-Items Consumer Price Index was 2.1 per cent, above the national average of 1.9 per cent. Monthly consumer prices were unchanged in Nova Scotia and down 0.4 per cent nationally.
Within Atlantic Canada, Nova Scotia had the highest inflation in the month. Inflation was lowest in Newfoundland and Labrador (+0.5 per cent).
The national CPI increase of 1.9 per cent on a year-over-year basis in September is the same as August. After declining in August, gasoline prices were down 10.0 per cent in September due to low global demand and refineries switching to less expensive winter blend. Passenger vehicle prices continued to strengthen in September, up 3.4 per cent compared to last year in part due to fewer incentives being offered. Growth in the mortgage interest cost index slowed compared to earlier in the year as the Bank of Canada has not risen interest rates since October 2018 and commercial banks are offering lower mortgage rates.
Year over year inflation was higher than last month for Prince Edward Island, Nova Scotia and British Columbia and unchanged or lower among the other provinces. The highest inflation rates for August 2019 were in British Columbia (+2.4 per cent) and Quebec and Manitoba (both +2.2 per cent).
Nova Scotia's consumer price inflation (year over year growth in CPI) excluding food and energy rose 2.8 per cent in September, higher than the national rate of 2.1 per cent. Price level gains for this index were largest in Quebec (both +2.9 per cent), and lowest in Newfoundland and Labrador (+1.0 per cent). On a monthly basis, Nova Scotia's index excluding food and energy was up 0.2 per cent.
The main contributors to the monthly (September 2019 vs. August 2019) NS CPI movement:
- Women's clothing (+11.3 per cent)
- Recreational equipment and services (excluding recreational vehicles) (+7.4 per cent)
- Inter-city transportation (-18.7 per cent)
- Purchase and leasing of passenger vehicles (-0.9 per cent)
The main contributors to the annual (September 2019 vs. September 2018) NS CPI movement:
- Passenger vehicle insurance premium (+14.1 per cent)
- Purchase and leasing of passenger vehicles (+3.6 per cent)
- Gasoline (-8.8 per cent)
- Telephone services (-4.2 per cent)
The CPI for food in Nova Scotia increased 4.1 per cent year-over-year with a 0.5 per cent decrease month-to-month. CPI growth in food (year over year) was up in all provinces this month. Prince Edward Island showed the highest year over year food price growth (+5.6 per cent). Nationally, annual food prices increased 3.7 per cent.
The Nova Scotia energy price index decreased by 4.4 per cent compared to a year ago. Monthly energy prices (September 2019 vs. August 2019) were down 1.0 per cent in Nova Scotia and 0.4 per cent nationally. Year-over-year energy price indexes declined in every province except British Columbia. The largest decline was in Alberta (-10.9 per cent).
Year over year, the consumer price index for shelter increased by 1.8 per cent in Nova Scotia and 2.3 per cent in Canada. Shelter costs were up in every province except Newfoundland and Labrador.
Major Components for September 2019
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 year over year inflation rate for Nova Scotia was above Canada's in September 2019. Nova Scotia's annual inflation has mostly been below the Canadian average since mid-2014, with the exception of only a few months. 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 in Nova Scotia (2.8 per cent) was higher than the national rate (2.1 per cent) in September.
Bank of Canada's preferred measures of core inflation
Compared with September 2018, CPI-Common increased 1.9 per cent, CPI-Median rose 2.2 per cent and CPI-Trim was up 2.1 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 1.9 per cent year over year.
Appendix Tables and Charts
A NOTE ON CONSUMER PRICE INDEX
On February 27, 2019, with the release of the January 2019 CPI, the basket of goods and services used in the calculation of the CPI was updated using 2017 weights. The base year, in which the CPI is set to equal 100, remains 2002.
The 2017 basket classification system was updated to add new, relevant goods and services, while removing some that are obsolete. Some minor changes will be made to published index titles in order to clarify the definition of some series.
The alcoholic beverages and tobacco products major component has been updated to include recreational cannabis. Additionally, medicinal cannabis has been added under medicinal and pharmaceutical products.
There is also a change to the calculation of the rent index. Month over month changes to the rent index will not be impacted as the previous month has been linked to the current month. However, year over year change calculations should be interpreted with caution, particularly in the year following this implemented change.
Source: Statistics Canada data portal: Tables 18-10-0004-01 and 18-10-0256-01
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