CPI Rises 1.2 Per Cent

Consumers Price Index: December 2000 quarter

The Consumers Price Index (CPI) rose by 1.2 per cent in the December 2000 quarter, latest figures from Statistics New Zealand show. This rise follows an increase of 1.4 per cent in the September 2000 quarter. The CPI is now 4.0 per cent higher than a year ago. This is the largest annual increase in the CPI since June 1995, however that movement was strongly influenced by increases in interest charges. Interest has been excluded from the CPI since the June 1999 quarter rebase.

In the December quarter it was noticeable that price rises were more widespread than in the September quarter. In the December quarter 64 per cent of items increased in price compared with 54 per cent in the September quarter. The September quarterly movement was strongly affected by rises in the price of petrol, cigarettes and tobacco. There were no items with a similar level of influence on the CPI in the December quarter.

The most significant item price increase in the December quarter came from international air travel, which rose 5.6 per cent. This may reflect a seasonal pattern as airfares have risen in four of the last five December quarters. The next most significant price increase this quarter was for the purchase and construction of new dwellings, which rose 0.9 per cent. Fruit and vegetable prices, which rose by 5.5 per cent, also strongly influenced the rise in the December quarter CPI. As these item rises suggest, the December quarter movement in the CPI was mainly influenced by rises in the transportation and food groups and to a lesser extent the household operation and housing groups.

The transportation group rose by 1.8 per cent in the December quarter. This compares with a rise of 3.3 per cent in the September quarter which was strongly influenced by a 13.1 per cent increase in petrol prices. In the December quarter petrol prices fell by 0.1 per cent ending a sequence of five consecutive quarterly increases. However, in the year from the December 1999 quarter to the December 2000 quarter, petrol increased in price by 23.1 per cent.

Food prices rose by 1.4 per cent in the December quarter following a rise of 1.2 per cent in the September quarter. The latest rise was influenced by a 9.1 per cent rise in the seasonally adjusted price of fresh fruit and a 5.5 per cent rise in the seasonally adjusted price of fresh vegetables.

The household operation group rose by 1.3 per cent in the December quarter, the largest increase since the September 1998 quarter. This increase was driven by a 4.5 per cent increase in the price of furniture and a 2.5 per cent increase in the price of household appliances and equipment. For the household operation group, price increases were more widespread in the December quarter than in the September quarter. In the December quarter 67 per cent of the items increased in price compared with 46 per cent in September.

Brian Pink GOVERNMENT STATISTICIAN

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