Prices inched up for high-spending households

Prices inched up for high-spending households in the December quarter

By Rebecca Howard

Feb. 1 (BusinessDesk) - High-spending households were hit by rising airfares and rental car costs in the December quarter while lower spending ones got some relief from cheaper vegetables.

High-spending households saw their cost of living lift 0.2 percent on the quarter while the lowest-spending ones saw it dip 0.1 percent, Statistics New Zealand said.

High-spending households were hit by a rise in international airfares and rental car prices, consumer prices manager Caroline White said. “Low-spending households don’t typically take many overseas trips or hire rental cars, so those price increases had little impact on them," she said.

Low-spending households benefited the most from cheaper vegetables in the last three months of 2018, she said. According to White "low-spending households typically spend more of their household budget on vegetables than other groups."

In addition to vegetables, living costs for low-spending households were brought down by price falls for soft drinks, waters and juices, cigarettes, and petrol, she said. These falls were offset by price rises in rents and meat and poultry.

Better weather has meant vegetable prices have been lower over the year as poor growing conditions in 2017 saw them shoot higher.

Superannuitants, Māori households and beneficiaries did not experience any inflation in December quarter compared to the September quarter.

Annual inflation for high-spending households, meanwhile, increased by just 1.8 percent in calendar 2018, kept low by cheaper airfares and a drop in tertiary education costs.

It was the lowest rate for any household group, despite the higher quarterly inflation in December. For all households, annual inflation was up 2.1 percent, outpacing the consumers price index which rose an annual 1.9 percent in the December quarter.

The highest annual inflation rate was 2.3 percent for Māori households, influenced by higher prices for petrol, cigarettes, and rent. Beneficiaries saw 2.2 percent inflation while superannuitants faced a 2.1 percent rise in the cost of living.

Over the course of 2018, price increases for petrol were the biggest contributor to inflation for almost all household groups, Stats NZ said. Beneficiaries and the lowest-spending household group were most affected by price increases for rents, while superannuitants were most affected by higher local authority rates. Lower prices for vegetables had a downward impact on inflation for all households.

(BusinessDesk)

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