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March 17, 2021ANALYSIS OF NOVA SCOTIA'S CONSUMER PRICE INDEX FOR FEBRUARY 2021 TRENDS – FEBRUARY 2021
Nova Scotia’s All-Items Consumer Price Index (CPI) increased 1.2% year-over-year in February 2021. Nationally, consumer prices were up 1.1% from a year earlier.
Compared to January 2021, monthly consumer prices increased 0.4% in Nova Scotia and 0.5% in Canada.
National year-over-year CPI growth increased from 1.0% in January to 1.1% in February, reflecting the increase in gasoline prices (+5.0%) which was the first year-over-year gain since February 2020. Gasoline prices increased 6.5% month-over-month in February, posting the third consecutive monthly gain.
The homeowners’ replacement cost index increased 7.0% year-over-year in February while the Mortgage Interest Cost Index declined 5.4%. Historically low interest rates and strong demand for homes continue to push new housing prices higher.
Impact of COVID-19 on the Consumer Price Index
Statistics Canada continued special CPI program measures for February 2021. Due to COVID-19 impact on product availability, select sub-components of the CPI received temporary special imputations. The sub-indexes for travel tours, components of spectator entertainment, recreational services, personal care services in some areas, and some components of use of recreational facilities and services in some areas were imputed from the monthly change in the all-items index - effectively removing the impact of these goods and services on the CPI. The price indexes for beer, wine and liquor served in licensed establishments were imputed in several regions, using the indexes to which consumers likely redirected their expenditures: beer, wine and liquor purchased from stores. Consistent with previous months affected by the COVID-19 pandemic, prices for suspended flights are excluded from the February CPI calculation because passengers were ultimately unable to consume them. As a result, selected sub-components of the air transportation index were imputed from the parent index (air transportation).
Prices increased year-over-year in all provinces led by Quebec (+1.6%). Manitoba (+0.4%) posted the lowest gain in percentage terms across all provinces in February 2021.
The main contributors to the monthly change (February 2021 vs. January 2021) in Nova Scotia CPI were:
- Gasoline (+7.3%)
- Purchase and leasing of passenger vehicles (+1.3%)
- Rent (+1.7%)
- Telephone services (-4.4%)
- Recreational equipment and services (excluding recreational vehicles) (-4.0%)
- Fresh or frozen beef (-7.2%)
Nova Scotia’s consumer price inflation (year-over-year) excluding food and energy increased 1.4% in February, posting the largest annual gain across all provinces. Nationally, consumer prices excluding food and energy were up 0.8%. Alberta and Manitoba were the only two provinces reporting annual price declines. Compared to January 2021, the CPI excluding food and energy increased 0.2% in Nova Scotia and Canada.
The CPI for food in Nova Scotia increased 0.6% year-over-year in February compared to the national average of 1.8%. Nova Scotia posted the lowest annual gain in February while Prince Edward Island posted the largest increase (+3.0%). Food prices increased 0.4% month-over-month nationally in February. Nova Scotia (-0.1%) and New Brunswick (-0.1%) were the only two provinces reporting monthly declines in food prices.
Nova Scotia energy prices increased 1.4% year-over-year in February compared to the national average 2.4%. All provinces except New Brunswick (-0.3%) and Saskatchewan (-0.1%) reported annual increased in energy prices. Alberta posted the highest year-over-year gain at 9.2% followed by Manitoba (+7.0%).
Compared to the previous month, energy prices in Nova Scotia were up 3.8%. Nationally, energy prices increased 4.0% month-over-month with all provinces reporting gains. The highest increase was reported in Alberta (+5.2%) while the lowest gain was in Newfoundland and Labrador (+2.3%).
Year-over-year, shelter costs in Nova Scotia increased 1.1% in February, lower than the national average increase of 1.4%. Compared to February 2020, shelter prices were down in Saskatchewan (-0.2%) while Manitoba posted the largest annual gain at 2.1%.
Monthly shelter prices increased 0.7% in Nova Scotia and 0.3% in Canada. Newfoundland and Labrador (-0.5%) and British Columbia (-0.2%) were the only provinces reporting month-over-month declines in shelter prices in February.
Nova Scotia's consumer price inflation (year-over-year growth in CPI) excluding energy was 1.3% in February compared to a national rate of 1.0%. Quebec (+1.6%) posted the largest year-over-year gain while the CPI excluding energy remained unchanged in Manitoba and Alberta in February.
Major Components for February 2021
The following table shows the price increases specific to Nova Scotia for the major components of the CPI this month:
Long Run Trends
In February 2021, the All-Items CPI year-over-year inflation rate for Nova Scotia was 1.2%, slightly above Canada's average rate at 1.1%. 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 (+1.4%) was higher than the national rate (+0.8%) in February 2021.
Bank of Canada's preferred measures of core inflation
Compared to February 2020, CPI-Common increased 1.3%, CPI-Median rose 2.0% and CPI-Trim was up 1.9% 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 1.2% 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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