The latest Consumer Price Index is out today for the December quarter and it shows that inflation is on the rise – and no one really seems to care about it.
The quarterly rise was 0.3%, which gives an annual rate of 1.3%, the first time it has been in the target range for two years. This is still quite low.
The consumers price index (CPI) inflation rate was 1.3 percent in the year to the December 2016 quarter, Statistics New Zealand said today.
“This is the first time in over two years that price increases for household purchases have been over 1 percent”, prices senior manager Jason Attewell said. “Household price inflation is up from a historical low of 0.1 percent for the December 2015 year”.
Prices for tradable goods and services were 0.1 percent lower in the year to December 2016. Despite higher quarterly prices, petrol and international airfares were cheaper than a year ago. Non-tradable goods and services showed a 2.4 percent increase, influenced by housing-related price increases.
Housing-related prices continued to increase, up 3.3 percent in the December 2016 year. Prices increased for newly built houses excluding land (up 6.5 percent) and for housing rentals (up 2.0 percent).
“Housing-related prices in Auckland increased more than the national average, with new houses up 8.2 percent and rents up 3.2 percent from a year earlier,” Mr Attewell said.
Quarterly prices rise 0.4 percent
The CPI rose 0.4 percent in the December 2016 quarter, following a 0.3 percent rise in the September 2016 quarter. After adjusting for seasonal effects, the CPI was up 0.7 percent.
“Higher prices for petrol, air fares, and new house builds were partly offset by lower prices for food and furniture,” Mr Attewell said.
Petrol prices made the largest upward contribution for the quarter, up 4.1 percent. The average price of a litre of 91 octane petrol in the December 2016 quarter was $1.82, up from $1.75 in the September quarter.
Food prices fell 1.2 percent in the latest quarter, with seasonally lower fruit and vegetable prices being partly offset by higher prices for dairy products.