Each quarter, the household living-costs price indexes (HLPIs) measure how inflation affects 13 different household groups and the average household. In contrast, the consumer price index (CPI) measures how inflation affects New Zealand as a whole.
For each of the household groups, the cost-of-living increase was above 6 percent for the 2023 year, compared to the 4.7 percent inflation over the same time, said James Mitchell, Stats NZ consumer prices manager.
Inflation, as measured by the CPI, eased more than the cost of living over last year, which is because the cost-of-living measure includes different ongoing costs that are not included in the consumer price index, such as interest payments, which have increased by 31 percent for the average household over the past 12 months, Mitchell said.
The two measures of inflation are typically used for different purposes. A key use of the CPI is monetary policy, while the HLPIs provide insight into the cost of living for different household groups.
Groups with a higher proportion of spending on mortgages had interest payments as the largest annual contributor to their cost of living. For groups that paid less in interest payments, their cost of living was still being driven by food and housing costs, Mitchell said.
The CPI measures housing as the cost of constructing a new home, whereas the HLPIs measure mortgage interest payments, he said.
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