How much living costs are rising

The cost of living is still rising, but new data shows it is rising at a slower rate.

Here is what the latest household living-costs price indexes from Stats NZ tell us:

Wait. What the heck are the household living-costs price indexes?

Apart from a bit of a mouthful, you mean? They’re a quarterly tool Stats NZ uses to measure how inflation affects different household groups, as well as the “average” household.

That’s different to the consumer price index (CPI), which measures how inflation affects the country as a whole.

They also include interest rates, which aren’t picked up by CPI data but, as you’re probably painfully aware, are a huge chunk of household expenses.

OK, so what does the latest data show?

There’s good news and bad news.

The bad news is the cost of living for the average household increased 6.2 percent in the year to March.

The good news is that, while the price of simply existing keeps rising, it’s rising at a slower rate. In the year to December 2023, the increase was 7 percent.

What’s driving the increases?

Interest, interest and more interest.

Stats NZ consumer prices manager James Mitchell said interest payments had made a significant contribution to higher living costs, with the average household having a 28 percent increase in interest costs in the last 12 months.

Insurance costs were another major mover, up 17.9 percent, while private vehicle costs were up 9.6 percent.

Yikes. So, who’s feeling it most? And is anyone NOT feeling it?

Good question and an interesting answer.

The largest increase (6.6 percent) was actually seen among the highest-spending households, although obviously that doesn’t necessarily mean they felt it more.

On the other hand, the lowest-spending households faced a 5.7 percent increase.

Beneficiaries’ costs were up 5.3 percent, Māori households’ costs were up 6.3 percent, and superannuitants’ costs increased by 5.2 percent.

Superannuitants were less affected by higher interest costs as they were more likely to own their own homes, Mitchell said.

However, the group had been hit by a 20 percent increase in insurance costs.

“Higher prices for insurance and rates have more impact than for other household groups who are more likely to rent or have mortgages,” he said.

– This story was first published by Stuff