NZ: Monthly Inflation Gauge fell 0.3% m/m in February – ANZ

Philip Borkin, Senior Economist at ANZ, notes that prices in the ANZ Monthly Inflation Gauge fell 0.3% m/m in February for NZ economy and the fall in tertiary education costs had the biggest impact of the subcomponents in the Gauge (-0.34%pt contribution).

Key Quotes

“We estimate tertiary education costs fell 18%. Without this, this subcomponent would have increased 2% m/m and the overall Gauge would have increased 0.1% m/m.”

“A third of the 36 subcomponents rose in the month, with the biggest contributors being rents and purchase of housing (+0.12%pts and +0.04%pts respectively). Of the five subcomponents that fell, seasonal falls in domestic air transport (-0.09%pts) and accommodation (-0.06%pts) were the largest contributors, outside of education.”

“Broad-based inflationary pressures are still lacking. Despite the Gauge recording decent upward momentum at present it does not suggest that a sustained lift in inflation is around the corner. Other data support this notion: the December quarter CPI outturn came in well below expectations and pricing intentions from our Business Outlook survey are middle of the historical range. Housing costs and Government imposed one-offs continue to do the heavy lifting, with still only limited signs that wage growth is starting to warm up.”