consumer price index

Liam Dann needs to take a chill pill. Even low inflation spells gloom and doom for this muppet

Sometimes the Media party needs to replace their shit-tinted glasses.

Liam Dann is a case in point, thinking that low inflation spells gloom and doom.

Tomorrow fresh statistics will tell us that the cost of living is barely rising at all.

The Consumer Price Index for the September quarter is forecast to show inflation has fallen in the past three months and is only just above zero for the year .

Most economists are picking it will come in at 0.1 or 0.2 per cent for the year to September 30 – down from 0.4 per cent in the year to June 30.

That’s dangerously close to deflation and it will be treated as bad news by economists.

But many New Zealanders will be feel that the low inflation story doesn’t stack up with their daily experience. ? Read more »

Aaaand more good news

A booming economy, a budget surplus, low unemployment…can it get any better?

Yes it can…food prices have fallen.

New Zealand food prices declined in September, impacted by cheaper bananas, lamb and chicken.

Food prices fell a seasonally adjusted 0.2 per cent in September following a 1.3 per cent jump in August, Statistics New Zealand said. On an unadjusted basis, food prices slid 0.9 per cent in the month.

Fruit and vegetable prices fell 5.1 per cent in September after jumping 5.8 per cent in August. Vegetable prices dropped 5.5 per cent with seasonally lower prices for tomatoes, capsicum and cucumber.

Fruit prices declined 4.4 per cent as bananas slid 13 per cent to $3.05/kg after spiking 22 per cent in August to a record high of $3.51/kg due to a supply shortage. ? Read more »

Guest Post: Some facts to dispel the alarmism over the “Debt Armageddon”

by Michael Littlewood

Two recent pieces in the Herald on New Zealanders? apparently terrible borrowing habits caught my attention in the last couple of days.

1. Debt armageddon:?In?NZ?s Half Trillion Dollar Debt Bomb, 7 June, the Herald?painted an apparently worrying picture of households overburdened with debt but there is actually another side to that story.

The latest Reserve Bank data on total household balance sheets showed that all households had borrowed a total of just 12.4% of total gross assets ($163 billion of debt on $1,286 billion of gross assets). ?Perhaps not all debt was included (though that seems unlikely); certainly, not all assets were included as the Reserve Bank acknowledges.

The recent growth in debt and the sustainability of house prices are actually less concerning than the ability of New Zealanders to service what are relatively modest borrowings. ?So income levels are more important than the total borrowed. ?Some may have borrowed too much and will pay the price for that. ?But across the whole country, there seems less to worry about than the Herald’s article suggested. ? Read more »

Poor, poor Labour: food prices continue to decline

Another crisis declared by Labour appears to be solving itself.

Remember them campaigning to remove GST from fruit and vegetables…because they were too expensive?

New Zealand food prices fell for the sixth time in seven months, led by cheap summer fruit and vegetables.

The food price index fell 0.6 percent in February, turning around a 2 percent increase in January, according to Statistics New Zealand. On an annual basis, prices were down 0.5 percent, it’s the fifth month in a row where prices were lower than a year earlier.

Food prices account for about 17 percent of the consumers price index, which has tracked below the Reserve Bank’s target band of between 1-and-3 percent for more than a year. While cheap international oil has been depressing prices more generally, that’s started feeding into firms’ expectations which the central bank fears will limit broader wage and price setting and prompted an interest rate cut by governor Graeme Wheeler yesterday. ? Read more »

Inflation well under control, heading for 15 year low

Perhaps it is time for the goals of the Reserve Bank on inflation to be changed.

With inflation heading for a 15 year low it looks like that, despite a booming economy, inflation is well under control.

Falling fuel prices may see annual inflation drop to a new 15-year low in figures due out this week, economists say.

March quarter inflation may fall 0.2 per cent to 0.3 per cent, economists said, in figures due out on Monday.

As a result, the annual inflation rate may be barely above zero for the year to March, perhaps just 0.2 per cent for the year. ? Read more »

More good news: it is about the same cost to stay fat now as it was last year

via underthetuscangun.com

via underthetuscangun.com

“Over the past year, food prices have largely remained flat,” Christina Leung, an economist at ASB Bank, said in a note. “The result adds to other inflation indicators pointing to a contained inflation environment. With little urgency for the RBNZ to resume its tightening cycle, we continue to expect the RBNZ will keep the OCR on hold at 3.5 percent until March 2015.” Read more »

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