Yesterday we were told two things in media headlines:
So what is it, did food prices go up lots or did they fall? Who was right, Stuff or NBR?
Well, they were both right – although Stuff was a bit more right
I remember this time last year, people were saying that we had massive inflation on the way – as shown by the price of tomatoes. This was a load of bullocks, and in the same way the idea that the 1.4% lift in food prices we saw in June is inflationary is bullockey … as food prices tend to rise sharply in June. Adjusting for the normal seasonal bit, prices were only up 0.2%.
Now Statistics New Zealand doesn’t like to seasonally adjust these figures for a reason – the actual seasonal pattern can be a bit weak and variable. As a result, we should treat any adjustment with care, and also compare prices now to where they were a year ago – in this way we can note that food prices were down 0.2% from last June.
Falling dairy prices have been a big part of the weakness – as has the fact that we haven’t had a repeat of the Queensland floods from last year, which had pushed up prices for fruit and vegetables significantly! All in all, the only thing we can take out of the data is that food price growth is really pretty weak.
As a result, if I had to pick which organisation was more accurate with their headline – it was stuff.co.nz. But neither organisation was completely wrong.