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April 22, 2020ANALYSIS OF NOVA SCOTIA'S CONSUMER PRICE INDEX FOR MARCH 2020 TRENDS - March 2020
In Nova Scotia March 2020, year over year growth for the All-Items Consumer Price Index was 0.9 per cent, the same as the national average of 0.9 per cent. Monthly consumer prices were down 0.8 per cent in Nova Scotia and 0.6 per cent nationally. All provinces experienced a slower year-over-year inflation rate in March than February.
British Columbia had the highest inflation compared to March 2019 at 1.2 per cent while inflation was lowest in Newfoundland and Labrador (+0.1 per cent).
The national year-over-year CPI change decreased from of 2.2 per cent in February to 0.9 per cent in March. This was the largest deceleration since September 2006 as COVID-19 outbreak slowed global economic activity. The monthly decline in the seasonally adjusted CPI of 0.9 per cent was the largest decline since series inception in 1992.
Nationally, energy prices were down 11.6 per cent on year-over-year basis with largest one-month price decline since November 2008. Compared to March 2019, gasoline prices were 21.2 per cent lower and fuel oil and other fuels fell 9.5 per cent. Lower demand for crude oil as the global economy, trade and travel slowed and oversupplied oil led to falling prices.
Durable good price inflation fell from year-over-year 1.1 per cent in February to 0.3 per cent in March with larger customer incentives and lower availability of new model-year vehicles compared to March 2019.
Service price growth slowed from 2.2 per cent in February to 2.0 per cent in March. Price growth for travel tours (+1.0 per cent), and air transportation(+6.0 per cent) slowed and prices for traveller accommodation (-2.2 per cent), rental of passenger vehicles (-6.4 per cent) and railway, highway bus and other inter-city transportation (-4.6 per cent) fell.
Impact of COVID-19 on the Consumer Price Index
The COVID-19 crisis started to impacted the CPI in March. Statistics Canada noted that the collection of the data was largely unaffected by the pandemic with most prices (99.8%) collected as scheduled prior to the closures of non-essential businesses. Suspended international flights were excluded from the March CPI calculations because passengers were unable to consume these services. Prices for travel tours scheduled after March 13 were imputed from higher a level index and additional traveller accommodation prices for the end of the month were collected and included in the average monthly price. The COVID-19 situation may affect product prices in an ambiguous manner as both demand and supply disruptions will be occurring.
Nova Scotia's consumer price inflation (year over year growth in CPI) excluding food and energy rose 2.2 per cent in March higher than the national rate of 1.7 per cent. Price level gains for this index were largest in Nova Scotia (+2.2 per cent), and lowest in Newfoundland and Labrador (+0.8 per cent). On a monthly basis, Nova Scotia's index excluding food and energy was up 0.3 per cent.
The main contributors to the monthly (March 2020 vs. February 2020) NS CPI movement:
- Women’s' clothing (+5.4 per cent)
- Travel tours (upward, n/a per cent )
- Gasoline (-20.3 per cent)
- Fuel oil and other fuels (-10.0 per cent)
The main contributors to the annual (March 2020 vs. March 2019) NS CPI movement
- Rent (+6.2 per cent)
- Passenger vehicle insurance premiums (+9.8 per cent)
- Gasoline (-26.5 per cent)
- Fuel oil and other fuels (-9.0 per cent)
The CPI for food in Nova Scotia increased 2.9 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 the highest year over year food price growth (+4.4 per cent). Nationally, annual food prices increased 2.3 per cent.
The Nova Scotia energy price index decreased by 13.2 per cent compared to a year ago. Monthly energy prices (March 2020 vs. February 2020) were down 10.7 per cent in Nova Scotia and 10.2 per cent nationally. Year-over-year energy price indexes decreased in every province with the largest decrease in Alberta (-17.1 per cent).
Year over year, the consumer price index for shelter increased by 2.6 per cent in Nova Scotia and 1.9 per cent in Canada. Shelter costs were up in every province.
Major Components for March 2020
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 the same as Canada's in March 2020 at 0.9 per cent. 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 (2.2 per cent) was higher than the national rate (1.7 per cent) in March 2020.
Bank of Canada's preferred measures of core inflation
Compared with March 2019, CPI-Common increased 1.7 per cent, CPI-Median rose 2.0 per cent and CPI-Trim was up 1.8 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 1.8 per cent year over year.
Appendix Tables and Charts
Source: Statistics Canada data portal: Tables 18-10-0004-01 and 18-10-0256-01
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