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July 16, 2024ANALYSIS OF CONSUMER PRICE INDEX FOR JUNE 2024 Nova Scotia’s all items Consumer Price Index (CPI) slowed to 3.5% year-over-year in June 2024, down from 3.7% year-over-year in May. This was the fastest year-over-year pace of price growth across provinces.
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 2.7% year-over-year in June 2024, down from 2.9% in May. Inflation was highest in Nova Scotia and slowest in Manitoba and Saskatchewan.
The most significant upward contributors (combining price increase as well as share of the consumption basket) to Nova Scotia's 3.5% year-over-year inflation were: gasoline, mortgage interest cost, rent, food purchased from restaurants, and fuel oil.
The largest downward year-over-year contributions were from: telephone services, recreational equipment and services (excluding RVs), home entertainment equipment/parts/services, children’s clothing, and traveller accommodation.
On a monthly basis, Nova Scotia's all items CPI was up 0.2% from May to June 2024. National prices were down 0.1% with increases reported for four provinces. Nova Scotia and Alberta reported the fastest percentage growth on a monthly basis. The largest monthly decline was in Québec. Prince Edward Island and Saskatchewan prices for all items were unchanged.
Major upward contributors to Nova Scotia's monthly consumer prices were: rent, traveller accommodation, inter-city transportation, passenger vehicle insurance premiums, and food purchased from restaurants. The main downward contributions were from: gasoline, personal care supplies/equipment, purchase/leasing of passenger vehicles, fuel oil, and purchase/operation of recreational vehicles.
Energy prices play a significant role in inflation rates. Nova Scotia's energy prices were up 11.0% from June 2023 to June 2024. Year-over-year energy prices were up 0.5% nationally with six provinces reporting higher energy prices. Nova Scotia 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 declined 2.9% from May to June 2024. National energy prices were down 2.1% with all provinces reporting lower prices compared to the previous month. British Columbia reported the largest monthly decline in energy prices.
Nova Scotia's energy prices (and overall inflation) are more sensitive to fluctuations in the global price of crude oil. In June 2024, gasoline prices increased 11.9% compared to a year ago in Nova Scotia. Six provinces reported higher gasoline prices, with the fastest growth in Nova Scotia. Manitoba reported the steepest drop in gasoline prices. Gasoline prices declined 4.6% from May to June in Nova Scotia (-3.1% nationally). All provinces reported monthly gasoline price declines with the largest decline in British Columbia.
Nova Scotia's year-over-year inflation for fuel oil was 17.6%, the third fastest growth among provinces. Nationally, the fuel oil and other fuels index increased 10.5% compared to June 2023. On a monthly basis, Nova Scotia's fuel oil prices were down 1.4%. National fuel oil prices were down 2.1% from May to June. Saskatchewan reported the fastest growth and Ontario reported the largest decline.
Food price inflation was 3.8% in Nova Scotia (June 2024 vs June 2023). National food prices increased 2.8% in June. Food prices were up in all provinces. Prince Edward Island reported the highest food price inflation while Québec reported the slowest food price growth.
On a monthly basis, Nova Scotia's food prices increased 0.7% from May to June. National food prices rose 0.5% with all provinces (except Québec) reporting higher prices on a monthly basis. The fastest growth was in Prince Edward Island.
Food and energy prices are heavily influenced by volatile global commodity markets. Nova Scotia's underlying inflation rate excluding food and energy was 2.5% from June 2023 to June 2024. Nationally, inflation excluding food and energy was 2.9%. Alberta reported the fastest growth while Newfoundland and Labrador and Manitoba 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 May to June 2024. Nationally, prices for all items excluding food and energy were unchanged with increases in seven provinces. Nova Scotia reported the fastest monthly increase while Manitoba reported the largest monthly decline.
Year-over-year shelter cost inflation was 6.3% in Nova Scotia in June 2024, slightly below the 6.4% shelter inflation reported in May. National shelter prices were up 6.2% with increases in all provinces. Alberta reported the largest year-over-year increase in shelter prices while Saskatchewan reported the slowest increase.
Monthly shelter costs were up 0.8% in Nova Scotia from May to June 2024, the largest monthly increase among provinces. Nationally, shelter costs were up 0.3% with increases in all provinces except Prince Edward Island.
Among detailed food products with available data, Nova Scotia's year-over-year inflation was fastest for preserved fruit as well as beef and sugar and confectionary. The largest year-over-year price decline was for fish/seafood.
In detailed shelter cost components, fuel oil reported the fastest year-over-year price increase, followed by rent. Homeowners replacement cost reported the slowest year-over-year increase.
Household operations/furnishings costs were up 0.5% overall. The largest increase was for internet access services. Prices fell for telephones, paper/plastic/aluminium products as well as for textiles, appliances, and utensils/tableware/cookware.
Clothing and footwear prices were down 5.0% year-over-year in June 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) led by personal care services.
Overall transportations costs were up 4.6% year-over-year in June. City busses had the only decline while gasoline had the largest increase.
Nova Scotia's overall prices for recreation, education and reading were up 1.7% from June 2023 to June 2024, with faster increases for travel services and accommodations. Prices declined the fastest for home entertainment equipment/services compared to June 2023.
Nova Scotia's prices for alcohol, tobacco and recreational cannabis were up 3.9% year-over-year with growth in all categories. Alcohol from licensed establishments had the largest increase, followed by cigarettes.
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 six 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 June 2024 were down for CPI-common and CPI-median while up for CPI-core and CPI-trim unchanged: CPI-common (2.3%), CPI-median (2.6%), CPI-trim (2.9%), CPI-core (1.9%).
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