Saturday, April 21, 2012

March 2012 CPI: What Inflation?

For the third month in a row, the price level hasn’t budged. Not that this means that there isn’t any inflation, it’s just that there’s been no movement in the general price level in the past three months (log annual and monthly changes; 2000=100):


Rather unusually, it’s almost across the board, at least as far as the major components are concerned. January-February saw the usual up and down movement in food prices, but in March – virtually no prices changed, except in the lesser categories. But these generally offset each other – a pickup in restaurant and hotel prices was offset by a drop in recreation services and culture prices, higher furnishing and household items prices was offset by falling clothing prices.

The net effect is a price level that has gone flat (index numbers; 2000=100):


If this continues, the headline inflation number will likely continue dropping more than expected.

Technical notes:

March 2012 Consumer Price Inflation Index report from the Department of Statistics


  1. how do we explain increase in food prices and properties prices over past many years against the slower increase of employment income?

  2. I came across some interesting data while looking at something else, which I'll post on soon if I have the time.

    But for both higher food prices and lower employment income, you can blame one source - China.

    Property prices on the other hand are largely due to increased urbanisation (migration from rural areas to urban areas, on top of existing population growth).

    Just FYI, property prices are not included under the Inflation numbers as technically properties are assets, not consumption goods. Housing rentals are included, but rents have not increased as much as prices have.

  3. good luck living with that foolishness....Dr Hishamh

  4. There's a big difference between high prices and inflation.