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September 17, 2024ANALYSIS OF CONSUMER PRICE INDEX FOR AUGUST 2024 Nova Scotia’s all items Consumer Price Index (CPI) slowed to 1.2% year-over-year in August 2024, down from 2.3% year-over-year in July.
Nova Scotia's inflation has been slowing after peaking at 9.3% in June 2022, though there have been periods of rising inflation, particularly on higher energy prices.
Nationally, consumer prices increased 2.0% year-over-year in August 2024, down from 2.5% in July. Inflation was highest in British Columbia and slowest in Saskatchewan.
The most significant upward contributors (combining price increase as well as share of the consumption basket) to Nova Scotia's 1.2% year-over-year inflation were: rent, mortgage interest cost, food purchased from restaurants, electricity, and passenger vehicle insurance premiums.
The largest downward year-over-year contributions were from: Gasoline, traveller accommodation, fuel oil, women’s clothing and telephone services.
On a monthly basis, Nova Scotia's all items CPI was down 0.5% from July to August 2024. National prices were down 0.2% with decreases reported for all provinces except Newfoundland and Labrador. New Brunswick reported the fastest percentage decline on a monthly basis.
Major upward contributors to Nova Scotia's monthly consumer prices were: furniture, clothing accessories, watches and jewellery, passenger vehicle insurance premiums, mortgage interest cost, and personal care supplies and equipment. The main downward contributions were from: gasoline, inter-city transportation, telephone services, travel tours, and women’s clothing.
Energy prices play a significant role in inflation rates. Nova Scotia's energy prices were down 5.4% from August 2023 to August 2024. Year-over-year energy prices were down 4.7% nationally with all provinces reporting lower energy prices. Alberta reported the fastest year-over-year decline in energy prices while Saskatchewan and Ontario reported the smallest decline.
On a monthly basis, Nova Scotia's energy prices fell 2.4% from July to August 2024. National energy prices were down 1.6% with seven provinces (except British Columbia) reporting lower prices compared to the previous month. Prince Edward Island reported the largest monthly decline in energy prices. Saskatchewan reported the largest gain.
Nova Scotia's energy prices (and overall inflation) are more sensitive to fluctuations in the global price of crude oil. In August 2024, gasoline prices were down 9.4% compared to a year ago in Nova Scotia. Eight provinces reported lower gasoline prices, with the steepest drop in British Columbia and Manitoba. Alberta and Saskatchewan reported the only gains in gasoline prices. Gasoline prices fell 3.9% from July to August in Nova Scotia (-2.6% nationally). All provinces except Saskatchewan and Manitoba reported monthly gasoline price declines with the largest decline in Nova Scotia.
Nova Scotia's year-over-year fuel oil prices were down 10.5%. Nationally, the fuel oil and other fuels index declined 10.2% compared to August 2023. Newfoundland and Labrador reported the steepest drop, and Québec reported the smallest decline. On a monthly basis, Nova Scotia's fuel oil prices were down 1.5%. National fuel oil prices were down 3.5% from July to August. Newfoundland and Labrador reported the steepest decline and Saskatchewan reported the smallest decline, while prices in Manitoba were virtually unchanged.
Food price inflation was 3.3% in Nova Scotia (August 2024 vs August 2023). National food prices increased 2.7% in August. Food prices were up in all provinces. New Brunswick and Newfoundland and Labrador reported the highest food price inflation while Québec reported the slowest food price growth.
On a monthly basis, Nova Scotia's food prices decreased 0.4% from July to August. National food prices edged down 0.1% with seven provinces reporting lower prices on a monthly basis. The largest growth was in Newfoundland and Labrador and the largest decline was in Prince Edward Island.
Food and energy prices are heavily influenced by volatile global commodity markets. Nova Scotia's underlying inflation rate excluding food and energy was 1.7% from August 2023 to August 2024. Nationally, inflation excluding food and energy was 2.4%. British Columbia and Alberta reported the fastest growth while Saskatchewan reported the slowest growth in inflation excluding food and energy prices.
On a monthly basis, Nova Scotia's prices for all items excluding food and energy were down 0.3% from July to August 2024. Nationally, prices for all items excluding food and energy were down 0.1% with declines in eight provinces. Manitoba reported the fastest monthly decline while Prince Edward Island and Québec reported the only gains.
Year-over-year shelter cost inflation was 4.4% in Nova Scotia in August 2024, below the 5.8% shelter inflation reported in July. National shelter prices were up 5.3% with increases in all provinces. Québec and British Columbia reported the largest year-over-year increase in shelter prices while Prince Edward Island reported the slowest increase.
Monthly shelter costs were down 0.1% in Nova Scotia from July to August 2024. Nationally, shelter costs were up 0.4% with increases in six provinces, led by Newfoundland and Labrador. The largest drop was reported in Manitoba.
Among detailed food products with available data, Nova Scotia's year-over-year inflation was fastest for fresh vegetables as well as eggs and pork. The largest year-over-year price decline was for sugar and confectionary.
In detailed shelter cost components, rent reported the fastest year-over-year price increase, followed by electricity. Fuel oil/other fuels and home maintenance/repairs cost reported the only year-over-year declines.
Household operations/furnishings costs were up 0.9% overall. The largest increase was for internet access services. Prices fell for telephones, paper/plastic/aluminium products as well as for, textiles, appliances, and utensils/tableware/cookware.
Clothing and footwear prices were down 8.0% year-over-year in August with declines in all sub-components except clothing accessories and jewellery and clothing materials and services.
Health and personal care costs were up 1.6% year-over-year on gains in all sub-components (except personal care supplies) led by personal care services.
Overall transportation costs were down 2.0% year-over-year in August. Vehicle insurance had the largest increase while gasoline had the largest decline.
Nova Scotia's overall prices for recreation, education and reading were down 1.8% from August 2023 to August 2024 with the fastest decline in home entertainment equipment and services and the fastest increase for reading (excluding textbooks) compared to August 2023.
Nova Scotia's prices for alcohol, tobacco and recreational cannabis were up 3.9% year-over-year with growth in all categories. Alcohol from licensed establishments had the largest increase, followed by beer from stores and Cigarettes.
Trends
Since the start of the Bank of Canada's inflation-targeting monetary policy regime, inflation for all items has generally been in the 0-4% range. Periods of above target inflation are typically followed by periods of slow price growth or declines. The most recent acceleration in inflation was the strongest since the inflation-targeting era began, though this inflation has faded with tighter monetary policy and lower commodity prices.
Many of these periods of accelerated and slowed inflation are attributable to volatile commodity prices, especially energy prices. Once the more volatile commodity prices are excluded, inflation in Nova Scotia has largely been below 2% for much of the last 20 years. However, the recent rise in inflation through 2021-2023 spreads beyond commodity prices, resulting in the longest period under the Bank of Canada's inflation-targeting regime with Nova Scotia's CPI excluding food and energy above 3%. In August 2024, Nova Scotia's inflation excluding food and energy has slowed to 1.7% year-over-year, the lowest inflation since March 2021.
The Bank of Canada examines 'core' measures of inflation that are intended to remove the effects of volatile components and capture underlying inflation trends that are more connected to capacity in the Canadian economy. Core measures of inflation may also indicate where all items inflation is headed.
Canada's core measures of inflation remained mostly at or below the Bank's target of 2% for over a decade prior to 2021. However, after prices accelerated in 2022, core inflation measures also started to rise, peaking at over 6% for the CPI-common measure before declining. Compared to the previous month, year-over-year core inflation measures in August 2024 were down for CPI-common, CPI-median, CPI-trim, and CPI-core: CPI-common (2.0%), CPI-median (2.3%), CPI-trim (2.4%), CPI-core (1.5%).
Source: Statistics Canada. Table 18-10-0004-01 Consumer Price Index, monthly, not seasonally adjusted; Table 18-10-0256-01 Consumer Price Index (CPI) statistics, measures of core inflation and other related statistics - Bank of Canada definitions
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