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January 19, 2022ANALYSIS OF NOVA SCOTIA'S CONSUMER PRICE INDEX FOR DECEMBER 2021 TRENDS – December 2021
Nova Scotia’s All-Items Consumer Price Index (CPI) increased 4.8% year-over-year in December 2021, down from the 5.3% year-over-year increase in November. Nationally, consumer prices were up 4.8% from a year earlier, ticking up from the from the 4.7% increase in November 2021.
Statistics Canada noted that the rising national prices were due to rising grocery prices as unfavourable weather conditions during growing season and supply chain disruption put upward pressure on prices. Supply chain disruptions also led to higher prices for durable goods. Home and mortgage insurance costs rose with higher construction costs and more weather events.
Grocery prices rose 5.7% year-over-year, the largest increase since November 2011. Higher prices for fresh fruit and bakery products were related to unfavourable weather conditions and summer drought. Rising demand and global supply chain disruptions were associated with higher prices for household appliances (+8.9%), the largest yearly gain since June 1982. Gasoline price growth slowed from a 43.6% year-over-year gain in November to 33.3% in December.
Impact of COVID-19 on the Consumer Price Index
There were no special treatments for CPI in December 2021.
Inflation was highest in Prince Edward Island (+6.7%) while Saskatchewan had the slowest growth (+3.5%).Compared to the previous month, eight provinces had decreases in the CPI index in December 2021 including Nova Scotia (-0.4%).
Nova Scotia’s consumer price inflation (year-over-year) excluding food and energy increased 2.8% in December 2021. Consumer prices excluding food and energy were up in all provinces led by Prince Edward Island (+4.1%). Newfoundland and Labrador had the smallest increase at 1.8%.
The CPI for food in Nova Scotia increased 5.2% year-over-year in December 2021. Nationally, food prices were up 5.2% from a year earlier. All provinces recorded year-over-year increase in food prices led by New Brunswick (+6.2%). Manitoba had the lowest increase at 3.3%.
Compared to the previous month, food prices in Nova Scotia were up 0.8%, above the national average of 0.6%. Nine provinces recorded month-over-month gains in food prices in December, only declining in Manitoba.
Year-over-year, shelter costs in Nova Scotia increased 5.8% in December 2021, above the national average increase of 5.4%. Compared to December 2020, shelter prices were up in all provinces with the largest increase in Prince Edward Island (+11.4%) and the smallest increase in Saskatchewan (+2.3%).
Nova Scotia's consumer price inflation (year-over-year growth in CPI) for energy was 22.1% in December compared to a national rate of 21.2%. Alberta (+33.0%) and Prince Edward Island (+28.3%) posted the largest year-over-year gain in while Saskatchewan (+14.8%) and Newfoundland and Labrador (+17.8%) had the smallest change in the energy index.
Nova Scotia's consumer price inflation (year-over-year growth in CPI) excluding energy was 3.2% in December compared to a national rate of 3.7%. Prince Edward Island (+4.4%) posted the largest year-over-year gain in while Newfoundland and Labrador and Saskatchwan (both +2.6%) had the smallest change in the CPI excluding energy.
Major Components for December 2021
The following table shows the price increases specific to Nova Scotia for the major components of the CPI this month:
The main contributors to the monthly change (December 2021 vs November 2021) in Nova Scotia CPI were:
- Homeowners' home and mortgage insurance (+6.1%)
- Rent (+0.9%)
- Fresh vegetables (+4.6%)
- Gasoline (-7.2%)
- Men's clothing (-9.3%)
- Traveller accommodation (-9.0%).
The main contributors to the yearly change (December 2021 vs December 2020) in Nova Scotia CPI were:
- Gasoline (+35.1%)
- Purchase and leasing of passenger vehicles (+7.4%)
- Fuel oil and other fuels (+34.0%)
- Telephone services (-13.3%)
- Mortgage interest cost (negative contribution, percent change not available)
- Travel tours (negative contribution, percent change not available)
Long Run Trends
In December 2021, the all-items CPI year-over-year inflation rate for Nova Scotia was 4.8%, the same as Canada's rate of 4.8%. Month-to-month movements in the indices can be different, but over time they generally follow the same overall trend. Nova Scotia’s all-items CPI increase of 5.4% in October 2021 was the largest increase since March 2003 (+6.9%).
Nova Scotia’s CPI excluding food and energy increased 2.8%, increasing 0.1 percentage point from the 2.7% increase the previous month. Canada CPI excluding food and energy rose 0.3 percentage points from 3.1% to 3.4%. The NS CPI excluding food and energy was previously above or near 3% in 2003.
Bank of Canada's preferred measures of core inflation
Compared to December 2020, CPI-Common increased 2.1%, CPI-Median increased 3.0% and CPI-Trim was up 3.7% 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 4.0% year-over-year. The change in the core inflation measures was up 0.1 percentage points for CPI-common, up 0.2 percentage points for CPI-median and up 0.3 percentage points for CPI-trim from the previous 12-month period.
Appendix Tables and Charts
Basket Update
With the June 2020 release the CPI basket of goods and services has been updated. The new basket weights are based on 2020 expenditure data, in which spending would reflect pre-pandemic patterns (Jan-Feb), an economy mostly in lockdown (March-June), and the emergence of new consumption patterns as economy re-opened (July-December). Statistics Canada notes that the "The data reflect shifts in spending due to the COVID-19 pandemic that will likely take some time to stabilize across goods and services, and geographic regions" and the June 2021 headline CPI for Canada would be the same if the previous basket weights (2017) were used. The weights for shelter (+2.86 percentage points), households operations, furnishings and equipment (+2.23 percentage points), and alcoholic beverages, tobacco products and recreational cannabis (+1.7 percentage points) are higher in the 2020 basket while transportation had the largest decline falling from a 19.72% share to 15.34% share. New products classes were added for shipping fees and local delivery fees (including restaurant and grocery delivery fees), digital subscriptions services to magazines, and video game consoles. Further information on the update can be found in An Analysis of the 2021 Consumer Price Index Basket Update, Based on 2020 Expenditures
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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