Consumer prices up

The regional economic upheavals, which pushed many businesses to the edge, have affected the retail industry in the CNMI as the commerce department recorded a significant increase in the overall consumer price index during the last quarter of 1999, compared with the same period in 1998.

A weighted consumer price survey released by the Central Statistics Division of the Department of Commerce for the 4th quarter of 1999 revealed a 3.4 index increase in the five commodity sectors to 269.6 from the previous year’s 266.2.

The 4th quarter of 1999 tally registered a slight increase for the five commodity groups — food, housing, transportation, apparel & upkeep, and health & recreation — at 1.1 index points when compared with the previous quarter’s 268.5 points.

Compared with the 1998 level, the average price for the fourth quarter in the food group remained at 205.7 although the sector increased by 0.1 index point from the previous quarter’s level of 205.8 points.

The housing sector registered a 10.6-point increase from 1998’s 215.2 to last year’s 225.8 points. Third quarter figure was recorded to have reached 223.8 points, lower by two points from the fourth quarter tally.

The apparel and upkeep group inched upward to 222.7 points during the fourth quarter of 1999, from 212.8 index points during the same period in the previous year. The sector registered a 5.8-point increase compared with the third quarter’s 216.9 points.

Resulting from Continental Micronesia’s decision to downsize its Northern Marianas operations, the transportation sector edged up by 7.9 points from 325.3 index points two years ago to 333.2 points last year.

Only one sector — the health and recreation group — glide down at 551 points during the October-December 1999 period from 552.5 during the same quarter although it is slightly up from the third quarter’s 550.2 points.

The consumer price index goes up when prices of commodity items increase. The Northern Marianas’ CPI was contrived from the 1977 Consumer Expenditure Survey which enabled the construction of baskets of consumer items.

During the 1988-1996 period, the Overall Index moved upward from 177.8 to 267.7 index value between the second quarter of 1988 to the last quarter of 1996, which is over two and a half times in its 1977 base.

The Overall Index fluctuated from quarter to quarter with a definite upward trend. Between 1988 and 1996, the Overall Index increased the highest in 1992 by 23.9 index points and increased the lowest in 1994 by 3.7 points.

The CPI Overall Index drops in some quarters suggesting price level decline from quarter to quarter.

But economists said this may be due to short term fluctuation in retail prices and not necessarily in the overall price level. They said item prices that are subjected to seasonal influences and other sales and marketing strategies.

To arrive at the group total, the average prices for items in a category were simply summed. The group total was deflated by the appropriate September 1977 base figure to arrive at the group index value.