NZ: Monthly inflation gauge up 0.8% - ANZ

Cameron Bagrie, Chief Economist at ANZ, notes that prices in the ANZ monthly inflation gauge were flat in April for New Zealand’s economy as the pricing within the Gauge continues to reflect a wedge between rising costs for housing versus flat-lining prices for most other products and services.

Key Quotes

“The Gauge was up 0.8% and 2.2% y/y (3month average).” 

“The housing and household utilities group continues to provide the main impetus for the Gauge. Purchase of housing rose 0.3% and rents were up a further 0.4% in April.”

“Other positive contributions came from electricity and recreational & sporting services. Domestic airfares and accommodation services made the largest negative contributions, reflecting seasonality.”

“Inflationary pressures are splintered but generally benign. 

• The Underlying Ex-housing Gauge fell 0.1% in April. This follows three flat monthly outcomes. It’s down 0.1% on three months prior.
• Another underlying gauge (excluding tobacco, alcohol and tertiary fees) was flat in the month and up 0.4% (3-month average).  
• Of the 36 groups in the Gauge, five rose, five fell and 26 remained unchanged in April.
• The Gauge was up 0.1% on a seasonally adjusted basis.”

“Any inflationary nuances continue to be narrowly concentrated in a few pockets across the economy. Anything housing-related is on the ascent. Beyond that, there is little to see.”

“A notable trend is that increases are concentrated in stuff you need to get by (housing, electricity and food, though the latter is not covered by this gauge) and falls tend to be for the fun stuff (travel, telecommunication services), which, while nice to have, aren’t essential.”