Consumer prices rise in Q3

The cost of basic consumer goods rose 6.4 index points in the third quarter of 2008 compared to the same period last year, further underlining the higher prices spent by CNMI residents for food, housing and utilities, medical care, education and communication, recreation, alcoholic beverages, and apparel.

According to latest data from the Department of Commerce, the consumer price index for the period of July to September 2008 climbed to 120.2 compared to the 113.8 recorded in the same period in 2007.

This means that a market basket of goods and services that cost $100 during the 2003 base period cost $120.2 in the third quarter of 2008. Most of the increases are on items tied to the spike in fuel prices the last few months, such as shipping, utilities, and retail.

In a quarter-to-quarter comparison, however, only the prices of food, education and communication, and other goods and services showed increases, with most categories posting declines across the board.

The rise in the consumer price index was led by a 14.7 index points increase in housing and utilities from 144.6 in the third quarter 2007 to 159.3 in the third quarter of 2008. This is attributed to the increase in the sharp spike in utilities and housing rentals.

Alcoholic beverages saw a slim decrease of 0.4 to103.5 in July-September of this year from 103.9 during the same period in 2007. According to the Commerce Department, the decrease is due to inventories concluding.

Due to an increase in shipping costs, goods for suppliers, utility rates and fuel, food saw a 9.6 index point increase from 106.5 in the third quarter of 2007 to 116.1 in the third quarter of 2008.

Apparel and recreation saw decreases of 1.5 and 2.7, respectively, from 102.3 and 100.8, respectively, in third quarter 2007 to 100.8 and 98.1,respectively, this quarter. The decrease for apparel is attributed to aggressive sales by vendors, while recreation went down because of aggressive sales on electronic inventories, according to the Department of Commerce. Aggressive sales means markdowns and price cuts on retail prices.

Because of premium changes in life insurance plans, medical care took a hit in the consumer price index line. It increased by 3.4 in the third quarter of 2008 to 104.5 from 101.1 in the same three months of 2007.

Education and communication, meanwhile, posted a slight increase of 0.2 from 100.6 to 100.8 bridging the third quarter of 2007 and the third quarter of 2008. This is attributed to a moderate increase in the prices of textbooks.

Transportation saw a 3.5 decrease from 100 in third quarter 2007 to 96.5 during the same period this year because of premium changes in auto insurance.

For the first time in several quarters, other goods and services did not remain at the base. It increased 7.7 from 100 during July-September 2007 to 107.7 during 2008’s third quarter. According to the Commerce Department, this is due to increased service charges for remittances.

A total of 762 items are divided into the nine major categories. Nearly 1,000 price quotations are collected during the middle month of each quarter to compute the CPI. Approximately 123 businesses and government outlets are included in the collection of price quotations.