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Consumers Price Index: December 2014 quarter
Embargoed until 10:45am  –  21 January 2015
Commentary

December 2014 quarter CPI overview: Quarterly fall of 0.2 percent and annual rise of 0.8 percent

Image, Consumers Price Index: December 2014 quarter overview: Quarterly fall of 0.2 percent and annual rise of 0.8 percent.  

Further information on the December 2014 quarter fall and annual increase

The December 2014 quarter fall of 0.2 percent follows three consecutive rises of 0.3 percent. The CPI often falls in December quarters.

The average price of 1 litre of 91 octane petrol in the December 2014 quarter was $2.00, compared with $2.12 in the previous quarter. By the end of the December quarter, petrol pump prices were 7 percent below the average price for the quarter, and as at 16 January were 17 percent below the average for the quarter. If petrol pump prices were to remain at their 16 January level for the remainder of the March 2015 quarter, petrol would have a -0.8 percentage points downward contribution to the CPI for the March quarter.   

For communication, cellphone handsets, cellphone services, and Internet services all recorded lower prices.

For international air fares, the rise was influenced by seasonally higher fares to Asia, Europe, and North America. International air fares and prices for package holidays rise every December quarter.

The latest quarterly rise for prices for newly built houses excluding land is the largest since a 1.7 percent rise in the June 2013 quarter. Prices for newly built houses excluding Auckland rose 1.2 percent.

The price increase for furniture and furnishings was influenced by less discounting compared with the previous quarter. In the December quarter, 31 percent of prices were discounted at the time of price collection, compared with 42 percent in the September quarter.

The annual price increase for cigarettes and tobacco was influenced by an 11.28 percent rise in excise duty from 1 January 2014. Excluding cigarettes and tobacco, the CPI rose 0.5 percent in the year to the December quarter.

 

Explore our interactive CPI visualisation. The tool will help you explore the changes in the prices and relative importance of the goods and services in the CPI basket.

CPI analytical series

In the December 2014 quarter, the tradable component of the CPI fell 0.8 percent and the non-tradable component rose 0.3 percent.

Lower prices for petrol, vegetables, and audio-visual and computing equipment were the main downward contributors to the tradable component. Higher prices for international air fares, package holidays, furniture and furnishings, and meat were the main upward contributors.

Prices for newly built houses excluding land, domestic air fares, and rentals for housing influenced the rise in the non-tradable component. Price falls for telecommunication services and bread and cereals partly countered this rise.

For the year to the December 2014 quarter, the tradable component decreased 1.3 percent and the non-tradable component increased 2.4 percent.

Lower prices for petrol and for audio-visual and computing equipment were the main downward contributors to the tradable component. The main upward contributions came from higher prices for meat and dairy products.

Price rises for cigarettes and tobacco, purchase of newly built houses excluding land, rentals for housing, and electricity were the main upward contributors to the non-tradable component. The main downward contribution came from lower prices for telecommunication services.

The annual movements for both the tradable and non-tradable components are the lowest since the June 2013 and March 2013 quarters, respectively.

For further information see our interactive CPI tradables and non-tradables visualisation tool.

In the December 2014 quarter the trimmed mean measures – which exclude extreme price rises and falls – had quarterly changes ranging from -0.1 percent to 0.1 percent. This indicates the ‘underlying’ price change (ie excluding extreme price rises and falls) was slightly above the all groups CPI.

The annual trimmed mean measures based on June 2014 quarter weights increased between 0.6 percent and 0.9 percent.

Further information is included in table 13 of this release.

Graph, Percentage points contribution to the CPI, items that rose or fell in price, December 2011 quarter to December 2014 quarter.

 

Annual adjustment of New Zealand superannuation rates and welfare benefits

Adjustments made to New Zealand superannuation rates and welfare benefits rates at 1 April 2015 will be based on the percentage change in the CPI 'all groups less cigarettes and tobacco subgroup' from the December 2013 quarter to the December 2014 quarter, which is an increase of 0.51 percent.

For more detailed data on the CPI see the Excel tables in the ‘Downloads’ box.

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