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October 15, 2024ANALYSIS OF CONSUMER PRICE INDEX FOR SEPTEMBER 2024 Nova Scotia’s all items Consumer Price Index (CPI) slowed to 0.9% year-over-year in September 2024, down from 1.2% year-over-year in August.
Nova Scotia's inflation has been slowing after peaking at 9.3% in June 2022, though there have been periods of rising inflation, particularly due to higher energy prices.
Nationally, consumer prices slowed to 1.6% year-over-year growth in September 2024, down from 2.0% in August. Inflation was highest in British Columbia and slowest in Saskatchewan as well as in Newfoundland and Labrador.
The most significant upward contributors (combining price increase as well as share of the consumption basket) to Nova Scotia's 0.9% year-over-year inflation were: rent, mortgage interest cost, passenger vehicle insurance premiums, food purchased from restaurants and electricity.
The largest downward year-over-year contributions were from: Gasoline, fuel oil, women’s clothing, traveller accommodation and home entertainment equipment/parts/services.
On a monthly basis, Nova Scotia's all items CPI was down 0.5% from August to September 2024. National prices were down 0.4% with decreases reported for all provinces. Prince Edward Island reported the fastest percentage decline on a monthly basis while Québec had the least decline.
Major upward contributors to Nova Scotia's monthly consumer prices were: passenger vehicle insurance premiums, tuition fees, women's clothing, household textiles and children's clothing. The main downward contributions were from: gasoline, inter-city transportation, fuel oil, furniture and traveller accommodations.
Energy prices play a significant role in inflation rates. Nova Scotia's energy prices were down 11.2% from September 2023 to September 2024. Year-over-year energy prices were down 8.3% nationally with all provinces reporting lower energy prices. Prince Edward Island reported the fastest year-over-year decline in energy prices while Ontario reported the smallest decline.
On a monthly basis, Nova Scotia's energy prices fell 5.1% from August to September 2024. National energy prices were down 4.8% with all provinces reporting lower prices compared to the previous month. Prince Edward Island, Manitoba and Alberta reported the largest monthly declines in energy prices. British Columbia reported the least decline.
Nova Scotia's energy prices (and overall inflation) are more sensitive to fluctuations in the global price of crude oil. In September 2024, gasoline prices were down 15.2% compared to a year ago in Nova Scotia. All provinces reported lower gasoline prices, with the steepest drop in Manitoba. Alberta reported the least decline in gasoline prices.
Gasoline prices fell 7.8% from August to September in Nova Scotia (-7.1% nationally). All provinces reported lower monthly gasoline prices with the largest decline in Manitoba and the least decline in British Columbia.
Nova Scotia's year-over-year fuel oil prices were down 22.4%. Nationally, the fuel oil and other fuels index declined 22.0% compared to September 2023. New Brunswick and Newfoundland and Labrador reported the steepest drops in fuel oil prices while British Columbia reported the smallest decline.
On a monthly basis, Nova Scotia's fuel oil prices were down 4.8%. National fuel oil prices were down 5.8% from August to September. Québec reported the steepest monthly fuel oil price decline while British Columbia reported the smallest decline.
Food price inflation slowed to 2.7% in Nova Scotia (September 2024 vs September 2023). National food prices increased 2.8% in September. Food prices were up in all provinces. 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 0.3% from August to September. National food prices were unchanged from August to September. Six provinces reported lower prices on a monthly basis (and food prices were unchanged in Prince Edward Island). The largest monthly food price decline was in Saskatchewan while the largest monthly food price growth rates were reported in Newfoundland and Labrador and British Columbia.
Food and energy prices are heavily influenced by volatile global commodity markets. Nova Scotia's underlying inflation rate excluding food and energy was 2.2% from September 2023 to September 2024. Nationally, inflation excluding food and energy was 2.4% with year-over-year increases in all provinces. 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 unchanged from August to September 2024. Nationally, prices for all items excluding food and energy were down 0.1% with declines in eight provinces. Newfoundland and Labrador and Prince Edward Island reported the fastest monthly declines while Québec reported the only gain.
Year-over-year shelter cost inflation was 3.0% in Nova Scotia in September 2024. National shelter prices were up 5.0% 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 0.3% in Nova Scotia from August to September 2024. Nationally, shelter costs were up 0.1% with increases in six provinces, led by Manitoba. The largest drop was reported in Nova Scotia.
Among detailed food products with available data, Nova Scotia's year-over-year inflation was fastest for eggs, preserved fruit, fresh vegetables and beef. The largest year-over-year price declines were for fish/seafood, baked goods and pork.
In detailed shelter cost components, fuel oil reported the steepest year-over-year price decline. Prices for most other shelter cost components were up year-over-year, led by rent, electricity and property taxes.
Household operations/furnishings costs were up 0.8% overall. The largest year-over-year price increases werer for internet access and household textiles. Prices fell for telephones, furniture, appliances, and utensils/tableware/cookware.
Clothing and footwear prices were down 4.4% year-over-year in September with declines in all sub-components except clothing accessories and jewellery and clothing materials and services.
Health and personal care costs were up 2.1% year-over-year on gains in all sub-components except personal care supplies. Personal care services reported the largest price increases.
Overall transportation costs were down 3.6% year-over-year in September. Vehicle insurance had the largest increase while gasoline had the largest decline.
Nova Scotia's overall prices for recreation, education and reading were down 0.1% from September 2023 to September 2024 with the fastest decline in home entertainment equipment and services and the fastest increase for other culture/recreation products.
Nova Scotia's prices for alcohol, tobacco and recreational cannabis were up 4.2% year-over-year with growth in all categories. Alcohol from licensed establishments had the largest increase.
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 receded 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 2021-2024 spread 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 September 2024, Nova Scotia's inflation excluding food and energy has slowed to 2.2% 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, core inflation measures rose in 2022, peaking at over 6% for the CPI-common measure before declining around the beginning of 2023.
The Bank of Canada's year-over-year core inflation measures in September 2024 were:
- CPI-common: 2.1% (up from 1.9% the previous month)
- CPI-median: 2.3% (unchanged from August's year-over-year inflation)
- CPI-trim: 2.4% (unchanged from August's year-over-year inflation)
The core CPI excluding volatile products and the effects of indirect taxes was up 1.6% (up from 1.5% in the previous month).
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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