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August 20, 2024ANALYSIS OF CONSUMER PRICE INDEX FOR JULY 2024 Nova Scotia’s all items Consumer Price Index (CPI) slowed to 2.3% year-over-year in July 2024, down from 3.5% year-over-year in June.
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 2.5% year-over-year in July 2024, down from 2.7% in June. Inflation was highest in New Brunswick and slowest in Saskatchewan.
The most significant upward contributors (combining price increase as well as share of the consumption basket) to Nova Scotia's 2.3% year-over-year inflation were: rent, mortgage interest cost, food purchased from restaurants, electricity, and passenger vehicle insurance premiums.
The largest downward year-over-year contributions were from: traveller accommodation, men’s and women’s clothing, home entertainment equipment/parts/services, and telephone services.
On a monthly basis, Nova Scotia's all items CPI was up 0.5% from June to July 2024. National prices were up 0.4% with increases reported for all provinces. Manitoba reported the fastest percentage growth on a monthly basis. The slowest growth was in Québec.
Major upward contributors to Nova Scotia's monthly consumer prices were: rent, inter-city transportation, gasoline, traveller accommodation, and passenger vehicle parts/maintenance/repairs. The main downward contributions were from: furniture, homeowners’ maintenance/repairs, personal care, purchase/leasing of passenger vehicles and sugar/confectionery.
Energy prices play a significant role in inflation rates. Nova Scotia's energy prices were up 2.0% from July 2023 to July 2024. Year-over-year energy prices were up 0.4% nationally with six provinces reporting higher energy prices. New Brunswick 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 rose 1.4% from June to July 2024. National energy prices were up 1.6% with all provinces (except British Columbia) reporting higher prices compared to the previous month. Manitoba reported the largest monthly gain in energy prices.
Nova Scotia's energy prices (and overall inflation) are more sensitive to fluctuations in the global price of crude oil. In July 2024, gasoline prices edged down 0.2% compared to a year ago in Nova Scotia. Seven provinces reported higher gasoline prices, with the fastest growth in Alberta. Manitoba reported the steepest drop in gasoline prices. Gasoline prices rose 1.7% from June to July in Nova Scotia (+2.4% nationally). All provinces except British Columbia reported monthly gasoline price gains with the largest gain in Manitoba.
Nova Scotia's year-over-year inflation for fuel oil was 1.8%. Nationally, the fuel oil and other fuels index increased 3.5% compared to July 2023. Québec reported the fastest growth and New Brunswick reported the largest decline. On a monthly basis, Nova Scotia's fuel oil prices were up 1.2%. National fuel oil prices were up 1.7% from June to July. British Columbia reported the fastest growth and Saskatchewan reported the only decline.
Food price inflation was 3.1% in Nova Scotia (July 2024 vs July 2023). National food prices increased 2.7% in July. Food prices were up in all provinces. Manitoba and Saskatchewan reported the highest food price inflation while Québec reported the slowest food price growth.
On a monthly basis, Nova Scotia's food prices increased 0.2% from June to July. National food prices rose 0.3% with all provinces (except British Columbia) reporting higher prices on a monthly basis. The fastest growth was in Manitoba and Saskatchewan.
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 July 2023 to July 2024. Nationally, inflation excluding food and energy was 2.7%. British Columbia 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 up 0.5% from June to July 2024. Nationally, prices for all items excluding food and energy were up 0.4% with increases in all provinces. Manitoba reported the fastest monthly increase while Prince Edward Island and Québec reported the slowest.
Year-over-year shelter cost inflation was 5.8% in Nova Scotia in July 2024, below the 6.3% shelter inflation reported in June. National shelter prices were up 5.7% 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 up 0.6% in Nova Scotia from June to July 2024, the second largest monthly increase among provinces. Nationally, shelter costs were up 0.2% with increases in all provinces except Prince Edward Island and Newfoundland and Labrador.
Among detailed food products with available data, Nova Scotia's year-over-year inflation was fastest for chicken as well as non-alcoholic beverages and beef. The largest year-over-year price decline was for pork and fish/seafood.
In detailed shelter cost components, rent reported the fastest year-over-year price increase, followed by electricity. Home maintenance/repairs cost reported the only year-over-year decline.
Household operations/furnishings costs were up 0.7% overall. The largest increase was for internet access services. Prices fell for telephones, paper/plastic/aluminium products as well as for utensils/tableware/cookware, appliances, and furniture.
Clothing and footwear prices were down 5.1% year-over-year in July with declines in all sub-components except clothing accessories and jewellery and clothing materials and services.
Health and personal care costs were up 2.2% year-over-year on gains in all sub-components (except personal care supplies) led by personal care services.
Overall transportations costs were up 1.2% year-over-year in July. Vehicle insurance had the largest increase while purchase/leasing of passenger vehicles had the largest decline.
Nova Scotia's overall prices for recreation, education and reading were down 0.9% from July 2023 to July 2024, with faster increases for reading (excluding textbooks). Prices declined the fastest for home entertainment equipment/services compared to July 2023.
Nova Scotia's prices for alcohol, tobacco and recreational cannabis were up 4.1% year-over-year with growth in all categories. Alcohol from licensed establishments had the largest increase, followed by beer from stores.
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 seven 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 July 2024 were down for CPI-common, CPI-median, CPI-trim, and CPI-core: CPI-common (2.2%), CPI-median (2.4%), CPI-trim (2.7%), CPI-core (1.7%).
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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