Nova Scotia’s all items Consumer Price Index (CPI) rose to 3.7% year-over-year in May 2024, up from 3.1% year-over-year in April.  This was the fastest year-over-year pace of price growth across provinces. 

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 2.9% year-over-year in May 2024, up from 2.7% in April. Inflation was highest in Nova Scotia and slowest in Manitoba. 

The most significant upward contributors (combining price increase as well as share of the consumption basket) to Nova Scotia's 3.7% year-over-year inflation were: gasoline, mortgage interest cost, rent, fuel oil and food purchased from restaurants. 

The largest downward year-over-year contributions were from: telephone services, traveller accommodation, men's and women’s clothing, and recreational equipment and services (excluding RVs).

On a monthly basis, Nova Scotia's all items CPI was up 0.2% from April to May 2024. National prices were up 0.6% with increases reported for all provinces except New Brunswick. Québec reported the fastest percentage growth on a monthly basis.

Major upward contributors to Nova Scotia's monthly consumer prices were: gasoline, recreational equipment and services (excluding RVs), travel tours, traveller accommodation, and financial services. The main downward contributions were from: rent, fuel oil, women’s clothing, food purchased from restaurants, and household textiles.

Energy prices play a significant role in inflation rates. Nova Scotia's energy prices were up 15.0% from May 2023 to May 2024. Year-over-year energy prices were up 4.1% nationally with eight provinces reporting higher energy prices. Nova Scotia reported the fastest year-over-year growth in energy prices while Manitoba reported the largest decline.

On a monthly basis, Nova Scotia's energy prices declined 0.2% from April to May 2024. National energy prices were down 1.1% with all provinces reporting lower prices except Manitoba compared to the previous month. Alberta reported the largest monthly decline in energy prices.

Nova Scotia's energy prices (and overall inflation) are more sensitive to fluctuations in the global price of crude oil.  In May 2024, gasoline prices increased 18.7% compared to a year ago in Nova Scotia. Eight provinces reported higher gasoline prices, with the fastest growth in Nova Scotia. Manitoba reported the steepest drop in gasoline prices. Gasoline prices increased 1.2% from April to May in Nova Scotia (-1.3% nationally). Eight provinces reported monthly gasoline price declines with the largest decline in New Brunswick. The largest gain was reported in Prince Edward Island. 

Nova Scotia's year-over-year inflation for fuel oil was 19.3%, the second fastest growth among provinces. Nationally, the fuel oil and other fuels index increased 10.1% compared to May 2023. On a monthly basis, Nova Scotia's fuel oil prices were down 4.9%. National fuel oil prices were down 4.1% from April to May.  

Food price inflation was 2.9% in Nova Scotia (May 2024 vs May 2023). National food prices increased 2.4% in May. Food prices were up in all provinces. Prince Edward Island reported the highest food price inflation while Ontario reported the slowest food price growth.

On a monthly basis, Nova Scotia's food prices increased 0.8% from April to May. National food prices rose 0.9% with all provinces reporting higher prices on a monthly basis. The fastest growth was in Manitoba while Alberta and Prince Edward Island reported the slowest monthly growth.

Food and energy prices are heavily influenced by volatile global commodity markets. Nova Scotia's underlying inflation rate excluding food and energy was 2.6% from May 2023 to May 2024. Nationally, inflation excluding food and energy was 2.9%. Québec, Ontario, and Alberta reported the fastest growth while Newfoundland and Labrador 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 up 0.2% from April to May 2024.  Nationally, prices for all items excluding food and energy were up 0.6% with increases in all provinces. Québec and Ontario reported the fastest monthly increases while New Brunswick reported the slowest growth.

Year-over-year shelter cost inflation was 6.4% in Nova Scotia in May 2024, below the 6.8% shelter inflation reported in April. National shelter prices were up 6.4% with increases in all provinces. Alberta reported the largest year-over-year increase in shelter prices while Saskatchewan reported the slowest increase.

Monthly shelter costs were down 0.7% in Nova Scotia from April to May 2024.  Nationally, shelter costs were up 0.4% with increases in four provinces. Ontario reported the fastest monthly growth in shelter prices and Nova Scotia reported the largest decline. Shelter costs were unchanged in Saskatchewan and Alberta.

Among detailed food products with available data, Nova Scotia's year-over-year inflation was fastest for preserved fruit as well as fats and oils. The largest year-over-year price decline was for fish/seafood.

In detailed shelter cost components, fuel oil reported the fastest year-over-year price increase, followed by home and mortgage insurance. Homeowners replacement cost reported the only year-over-year decline.

Household operations/furnishings costs were up 0.4% overall. The largest increases were in internet access services. Prices fell for telephones, paper/plastic/aluminium products as well as for textiles and utensils/tableware/cookware.

Clothing and footwear prices were down 4.9% year-over-year in May with declines in all sub-components except clothing accessories and jewellery and clothing materials and services.

Health and personal care costs were up 4.1% year-over-year on gains in all sub-components led by personal care services.

Overall transportations costs were up 6.4% year-over-year in May. City busses had the only decline while gasoline had the largest increase.

Nova Scotia's overall prices for recreation, education and reading were up 1.7% from May 2023 to May 2024, with faster increases for purchase/operation of recreational vehicles. Prices declined the fastest for home entertainment equipment/services compared to May 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 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 the last five months, Nova Scotia's inflation excluding food and energy has slowed to less than 3% year-over-year. 

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 May 2024 were up for all core measures (except CPI-common): CPI-common (2.4%), CPI-median (2.8%), CPI-trim (2.9%), CPI-core (1.8%).

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

Year-over-year (May 2024 vs May 2023)

All items: Consumer prices in Nova Scotia increased 3.7%. The national average inflation was 2.9%. In Halifax consumer prices increased 3.8%.

All items excluding food and energy: Nova Scotia consumer prices outside of food and energy increased 2.6%. This was below the national average increase of 2.9%.

Month-over-month (May 2024 vs April 2024)

All items: Consumer prices in Nova Scotia increased 0.2%. Nationally, consumer prices increased 0.6% compared to the previous month. In Halifax consumer prices rose 0.1%.

All items excluding food and energy: Nova Scotia consumer prices excluding food and energy grew 0.2% month over month in May 2024. Nationally, consumer prices outside of food and energy were 0.6% higher compared to the previous month.

Source: Statistics Canada.  Table  18-10-0004-01   Consumer Price Index, monthly, not seasonally adjusted

BACKGROUND

Statistics Canada has released their regular update for Consumer Price Index (CPI) basket weights and composition, available here. The updated basket weights will be used with the release of May 2024 CPI on June 25, 2024.

CPI basket quantities are fixed to the reference period of the basket weights which are used to estimate consumer expenditures for the upper-level aggregation. Larger weights represent a large share of expenditures on the category and the more a price change will impact headline CPI. For 2023, the expenditure weights are derived from Household Final Consumption Expenditures, the Survey of Household Spending and alternative sources to account for shifts in spending. Updating the basket is needed as expenditure patterns shift in response to prices, income levels, demographics, habits and new technology/products.

Each good or service in the basket is assigned a basket share proportional to consumption expenditure for which they account. The CPI classification of goods and services is organized according to a top-down hierarchical structure from the eight major components, 220 basic aggregates and 478 elementary aggregates, most of which are unpublished. These elementary aggregates are added or deleted as consumption pattern changes. At the elementary aggregate level, the classification includes sample of items that characterize all products in the class. Representative products are chosen for items that are widely available and known to be among the most popular with consumers.

Changes for the 2024 update include making some elementary aggregates into basic aggregates to provide more granular data. These include different cuts of fresh or frozen beef, pork, and chicken. As ridesharing became available in more locations, including Nova Scotia and Prince Edward Island, basket weights have been added for this service. Various elementary aggregates under the audio equipment index were streamlined to reduce unnecessary detail at the lowest levels of aggregation, with no changes to the goods and services priced under this series.

2024 WEIGHTS 

Among the eight major components of the CPI basket, Nova Scotia has the second lowest basket share for food at 16.49%. Nationally the share is 16.69% with the highest share in Prince Edward Island and the lowest in Ontario.

Shelter represented the largest share of the CPI basket across the country. Nova Scotia's CPI basket share is 25.81%, lower than the national average. British Columbia and Ontario had notably higher shares of shelter expenditures. The lowest basket share was in Newfoundland and Labrador.

Nova Scotia's CPI basket share for household operations and furnishings was below the national average at 12.73%. Prince Edward Island had the highest share of expenditures in this component of CPI.

Nova Scotia's CPI basket share for clothing and footwear is lowest among provinces. Quebec had the highest basket share in 2023.

Transportation reflects 18.07% of expenditures in the CPI basket in Nova Scotia, higher than the national average in 2023. The lowest basket share for transportation was in British Columbia and the highest was in Newfoundland and Labrador.

Nova Scotia's basket share for health and personal care was the highest among provinces at 6.36% in 2023. British Columbia reported the lowest basket share for this component in 2023.

Nova Scotia had the second highest basket share for recreation, education and reading among provinces, led by Manitoba. Newfoundland and Labrador had the lowest expenditure share for this component in their 2023 CPI basket. 

Alcoholic beverages, tobacco products and recreational cannabis typically represent the smallest share of the CPI basket in a given province (exception: Newfoundland and Labrador, second lowest to health/personal). In 2023, 5.5% of the CPI basket in Nova Scotia was for expenditures in this component, higher than the national average. Ontario had the lowest basket share in this component among provinces. 

The Atlantic provinces have higher basket shares for energy products than other provinces. In 2023, 10.09% of the CPI basket in Nova Scotia was for energy expenditures. Nationally, this was 7.01% in 2023.

Nova Scotia had higher basket shares for food purchased from stores and a smaller share of food purchased from restaurants compared to the national average.

Basket shares for the shelter component of CPI are lower in Nova Scotia compared to the national average (exception: maintenance and repairs and electricity). Fuel oil and other furls basket share was notably higher in Nova Scotia compared to the national average.

Household operations had lower basket shares in Nova Scotia for most components compared to the national average except for telephone services, paper/plastic/aluminum supplies, appliances and small kitchen appliances and utensils.

Clothing and footwear reflected a lower basket share in Nova Scotia compared to Canada except for accessories/watches/jewellery.

Transportation had higher basket shares for purchase and leasing of passenger vehicles, gasoline, parts/maintenance and repairs and inter-city transportation.

Health and personal care basket shares were higher in Nova Scotia for all sub-components except personal care services.

Among recreation, education and reading, Nova Scotia's CPI basket shares were typically higher than the national average except for recreation equipment/services and home entertainment.

Beer and liquor purchased from stores and cigarettes reflected larger shares of the Nova Scotia CPI basket for 2023 compared to the national average. Wine purchased from stores and alcohol served in bars/restaurants had smaller CPI basket shares in Nova Scotia compared to the national average.

Sources:

Statistics Canada. An Analysis of the 2024 Consumer Price Index Basket Update, Based on 2023 Expenditures

Statistics Canada. Table 18-10-0007-01  Basket weights of the Consumer Price Index, Canada, provinces, Whitehorse, Yellowknife and Iqaluit

Year-over-year (April 2024 vs April 2023)

The inflation rate rose to 2.7% in the European Union and to 2.6% in the Euro Area in May 2024.

The fastest inflation was reported in Romania (5.8%) while the slowest inflation rates were in Latvia and Finland (0.0% and 0.4% respectively).

Energy prices rose 0.5% in the European Union and 0.3% in the Euro Area in May 2024.

Food price inflation has continued to slow to 1.4% for the European Union and remained unchanged at 1.9% in the Euro Area in May 2024. 

Excluding the impacts of energy, food, alcohol and tobacco prices year-over-year inflation rose to 3.2% in the European Union and to 2.9% in the Euro Area in May 2024.

Source: Eurostat; Eurostat Data

The United States Consumer Price Index (not seasonally adjusted) for All Urban Consumers increased 3.3% year-over-year in May 2024, this was down from a year-over-year pace of 3.4% in April. 

Compared to May 2023, the US energy price index rose 3.7%. The food index rose 2.1% and the shelter index was up 5.4% year-over-year.

The US CPI excluding food and energy rose 3.4% compared to May 2023. 

Note: Canada and Nova Scotia May 2024 CPI figures will be released on June 25, 2024.

Sources: Statistics Canada. Table 18-10-0004-01  Consumer Price Index, monthly, not seasonally adjusted; US Bureau of Labor Statistics retrieved from the Federal Reserve Bank of St. Louis