Prices of consumer goods increase slightly in last quarter of ’08

After a slight breather in the third quarter of 2008, the cost of basic consumer goods on Saipan rose by 0.3 index points in fourth and final quarter of last year, according to the latest report from the Department of Commerce.

The Saipan Consumer Price Index for the period of October and December 2008 climbed to 120.5 compared to the 120.3 recorded from July to September 2008.

This means that a market basket of goods and services that cost $100 during the 2003 base period went up to $120.50 in the final three months of last year, which translates to a $20.50 increase.

The quarter preceding that saw the Saipan CPI dip from 120.9 to 120.2—a 0.7 drop.

Year-by-year comparison, meanwhile, shows that prices of basic commodities rose by 6.4 index points as the Saipan CPI stood at 114.1 points in the fourth quarter of 2007.

The rise in the consumer price index in the fourth quarter of 2008 was led by an 8.0 index point rise in transportation cost from 96.4 in the third quarter to 104.4 in the fourth quarter. This is blamed on premium charges on auto insurance and increased rates for car repairs.

The cost of medical care also shot up by 3.6 index points to 108.1 from 104.5 three months before. Commerce said that besides previous increases in medical rates, premium changes in life insurance plans also led to the rise.

Food expenses also showed a 2.7 index point increase in the final three months of 2008—from 116.1 to 118.8. Commerce said the increase is attributed to a similar rise in shipping fees by shippers, cost of good suppliers, utility rates, and fuel for delivery.

It added that the frozen food section led the increase in cost but canned goods and other pre-packed foods also contributed in its prices going up.

Alcoholic beverages also witnessed an increase as a moderate rise in the cost of spirits upped its index points from 103.5 to 104.3—a 0.8 rise.

The cost of apparel, meanwhile, went up 0.6 percent—100.8 to 101.4—as most of the clothes that were on sale during the holidays were not within the market basket.

Another category that helped rev up the CPI was the cost of education and communication, as moderate increases in textbooks and tuitions led to a 0.5 index point rise from 100.8 to 101.3 in the fourth quarter of 2008.

On the bright side, the cost of housing and utilities saw a 6.6 index point drop in October-December 2008 as lowered fuel service charge rate by the Commonwealth Utilities Corp. coupled by a depreciation in rental rates—as owners aggressively tried to keep their old tenants and entice new ones with discounted rental rates—contributed to the group settling to 152.7 index points from the previous quarter’s 159.3.

Of the nine groups the CPI is based, recreation and other goods and services remained constant at 98.1 and 107.7, respectively.

The Saipan CPI is designed to measure changes in prices of commodities and services normally purchased by the community. Like the U.S. CPI, it is based on the concept of representative “market basket,” a sample of goods and services that the consumer purchases. The CPI was first developed during the early part of 1977 and was rebased in 2003.

The selection of weight distribution was based on household expenditure patterns derived from a household incomes and expenditure survey conducted by the Central Division in conjunction with the U.S. Census Bureau. A total of 762 teams in the Saipan CPI are divided into nine major groups and sub-groups and indices are computed at different levels of aggregations.

Commerce does not have a CPI for Tinian and Rota.