Human error correction doubles inflation

After discovering a ‘human error’ Statistics New Zealand has adjusted the inflation rate for the year to September, doubling it to 0.4%.

Stuff: Rego error at Statistics NZ doubles inflation, complicates life for Reserve Bank

Human error has been blamed for a mistake in official figures about the cost of living, creating a new headache for the Reserve Bank on whether to cut interest rates.

On Monday morning Statistics New Zealand blamed a “manual processing error” for its decision to correct its estimate of the increase in inflation in the year to September, from 0.2 per cent to 0.4 per cent.

The mistake related to how much the agency believed the cost of licensing a small car – commonly referred to as registration or ‘rego’ – had dropped in the September quarter.

I’m surprised that one mistake on one class of car registration makes that much difference.

This change may complicate this weeks Official cash rate annoiuncement.

Although the correction may appear minor, and inflation remains below the official target, it adds weight to the arguments against the Reserve Bank lowering the official cash rate (OCR) on Thursday to a new all time low of 1.75 per cent.

Most bank economists were already questioning the need for a further cut even before the correction was announced.

“I still think the Reserve Bank shouldn’t be cutting rates,” Bagrie said.

“If it were me, I’d be biased towards holding [the OCR at 2 per cent]. But I think [the Reserve Bank’s] forward guidance has been so strong that they’re going to find it hard to step away [from cutting].

I’m not sure what difference it will make whether the OCR is lowered or not as banks have already indicated that mortgage rates are likely to go up anyway due to international rates.

 

Increasing immigration

On Radio NZ about an hour ago they mentioned planning for a population increase of a million in Auckland alone over the next few decades.

Stuff reports Net migration to NZ hits a new record of 65,000

If say 50,000 of them went to Auckland, at that rate they would add a million in twenty years.

But much if the inflow comprises returning New Zealanders and there must only be so many of them who will return.

Migration continues to smash records, with the net gain in the last year equivalent to a city the size of Nelson.

According to Statistics New Zealand, the net gain from migration in the year to January 31 hit 65,900 in the 12 months to January 31, with a gain of 6100 in January alone.

The annual gain in the year to January 31 was the 18th straight month in which migration was running at record levels, while migration from Australia is the strongest in almost 25 years.

“Migrant arrivals reached a new high of 123,000 and departures fell to 57,100,” Statistics New Zealand said.

“The net gain from Australia numbered 1,300 for the January 2016 year, surpassing the 1,000 mark for the first time since the October 1991 year. This was the fourth month in a row to show an annual net gain of migrants from Australia.”

This is a big turnaround…

Just a few years ago, New Zealand was recording a net loss of around 40,000 people a year to Australia, however a cooling of the Australian economy has seen thousands of Kiwis coming home, and an increase in Australians moving here.

Kiwi flows could easily turn around again, especially if the job market recovers in Australia.

 

GDP growth up for June quarter

Statistics New Zealand have announced 0.4% growth in GDP for the June quarter, following a 0.2% increase in the March quarter.

Economic growth boosted by services and primary industries

Growth in services and primary industries supported a 0.4 percent increase in GDP in the June 2015 quarter, Statistics New Zealand said today.

Agricultural production increased 3 percent in the June 2015 quarter, due to increased meat and dairy farming.

“Despite falling milk prices, we’re seeing growth in dairy production,” national accounts manager Gary Dunnet said. “But over the year, agriculture is up only a little, due to dry conditions last summer.”

Food, beverage, and tobacco manufacturing was also up in the June 2015 quarter, due to strong dairy product manufacturing. Inventories of meat and dairy products built up as exports of these goods fell.

Mining also made a partial recovery from recent falls, with a 2.5 percent increase in the latest quarter. The main driver was oil and gas extraction, but this was partly offset by decreases in coal mining and oil exploration.

Collectively, the service industries were up 0.5 percent in the June 2015 quarter, but it was a mixed picture at the lower level – six industries grew and five declined. Growth was driven by business services (up 2.3 percent) and rental, hiring, and real estate services (up 1.1 percent), but these gains were partly offset by a 1.8 percent decrease in transport, postal, and warehousing – the biggest fall since March 2009.

On the expenditure measure of GDP, domestic demand was strong (up 1.3 percent). Household spending was up 0.9 percent, with increased spending on fruit and vegetables, and big-ticket items including cars and furniture. Business investment also increased (2.2 percent) – but this was offset by falling exports and rising imports.

The size of the economy (in current prices) was $241 billion for the year ended June 2015.

More data and analysis: Gross Domestic Product: June 2015 quarter

New Zealand Official Yearbook available online

A digital version of official yearbooks going back to 1893 is now available on the Statistics New Zealand website. A great source of historical information.

Digital Yearbook Collection

Viewing and using the yearbooks

Choose a yearbook from the list and press [Ctrl]-F to search within it using keywords. Our main website search box will not search within these files.

So no global search available, but browsing and year searching could find a lot more interesting things.

There’s a large amount of information and statistics in each yearbook.