Bermuda Consumer Price Index
What is the Consumer Price Index?
The Consumer Price Index (CPI) is a statistical tool used for measuring changes in the general level of prices of consumer goods and services purchased by private households. The index measures price movements of a given quality and quantity of goods and services. The mix of these consumer goods and services comprising the index, are figuratively thought of as a “shopping basket.” In constructing this “shopping basket ”, the selected goods and services are organized first by commodity type. They are then divided into sub-components and assigned to a major expenditure group. The Bermuda CPI is structured into nine expenditure groups or sectors:
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BERMUDA CONSUMER PRICE INDEX
March 2004 - Press Release
Department of Statistics
The base period for the Consumer Price Index is January 1995
Food Rent Clothing & Footwear Tobacco & Liquor Fuel & Power Transport & Vehicles Household Goods, Services & Supplies Education, Recreation & Reading Health & Personal Care
Rate of Inflation
Tel: (441) 297-7761 Fax:(441) 295-8390 e-mail: statistics@gov.bm
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The compilation of the CPI involves the processing of several thousand price quotations. The Department of Statistics
n March 2004, the annual rate of inflation was measured at 3.1%. This increase was unchanged from the 3.1% recorded in February this year.
Within the main sectors of the index, Tobacco & Liquor posted the strongest rate of price increase of 4.6% during the month. Consumers paid more for beer, wine, alcohol and cigarettes. The main stimulus for the upward movement in this sector was caused by a 12.3% increase in cigarette prices, as retailers passed the cost of the higher duty charges on to consumers.
Concepts and Definitions
Base Period - the time period which is used as a reference point for measuring the price change of goods and services. The base period for the Bermuda CPI is January 1995. Price Index Number - a single figure that shows how a set of prices has changed over a specified period of time. An index number on its own means nothing. It must be compared with an index number from another period to have meaning. For example, a comparison of the index number 107.1 for January 1998 with 109.1 for January 2000, reveals that prices have increased by 1.9 percent. Laspeyres Equation - The CPI is computed using this statistical equation. This formula calculates the total amount of money a household needs today to purchase the same basket of goods and services that it bought in the base period, January 1995. Weighted Average - a mathematical formula that takes into account the relative importance of an item’s price change compared to the overall change in the sector or CPI. Inflation - a process of rising prices, resulting
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in diminishing purchasing power of a given sum of money. Cost of Living Index - many individuals refer to the Consumer Price Index (CPI) as a costof-living index. The CPI is an index of pure price change only. A cost-of-living index reflects the changes in buying or consumption patterns that consumers would ordinarily make to adjust to any change in the price of a good or service.
During the month, households experienced a 0.2% increase in the average cost of goods and services in the CPI “shopping basket”. The all-items index rose from 125.4 index points in February to 125.6 in March 2004.
Summary Statistics
Monthly Period 2003 Mar Apr May June July Aug Sep Oct Nov Dec 2004 Jan Feb Mar Index Annual % Change +2.8 +3.3 +3.3 +3.2 +3.1 +3.4 +3.8 +3.4 +3.3 +3.2 +3.0 +3.1 +3.1
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Quarterly Period 2002 Q1 Q2 Q3 Q4 2003 Q1 Q2 Q3 Q4 2004 Q1 Index Annual % Change + 2.4 + 2.3 + 2.1 + 2.5 + 2.9 + 3.3 + 3.4 + 3.3 +3.1
A Comparison of Rates of Inflation(%) Selected Countries & Bermuda
2000 2001 2002 2003 Mar/04
wishes to acknowledge the cooperation of the business community in supplying the required price data.
Bermuda United States 1 Canada2 United Kingdom3
2.7 3.4 2.7 3.0
2.9 2.8 2.5 1.8
2.3 1.6 2.3 1.6
3.2 2.3 2.7 1.4
3.1 1.7 0.7 1.1
121.8 123.0 123.1 123.4 123.3 123.8 124.7 125.0 125.0 125.1 125.1 125.4 125.6
118.2 119.3 119.8 121.0 121.6 123.2 123.9 125.0 125.4
Sources: 1. US Bureau of Labour Statistics 2. Statistics Canada 3. UK Office of National Statistics
Bermuda Consumer Price Index
Bermuda Consumer Price Index
Sectors Comprising the Index
Food prices advanced 0.4% in March 2004. Within the food basket, notable price movements for selected grocery items included: milk (+3.3%); lamb leg per lb (+2.7%); preserved meats (+2.4%); baby food (+1.7%); salad dressing (+1.4%); boneless pork loin roll (-5.2%); and imported lettuce (-1.3%). therefore experienced lower electricity costs for the month of March, down 2.2%. Household Goods, Services & Supplies remained relatively static at the sector level. However the average cost of household supplies rose by 2.0%.
Data Table
All Items 1993
WEIGHTS
Food
Rent
Clothing & Footwear
Tobacco & Liquor
Fuel & Power
Household Goods, Services & Supplies
Transport & Vehicles
Education, Recreation & Reading
Health & Personal Care
1000
152
276
47
21
33
175
135
80
81
Annual Average
1999 2000 2001 2002 2003 Monthly 2001 Nov Dec 2002 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 2003 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2004 Jan Feb Mar Mar‘04 Feb‘04 Mar‘04 Mar‘03 +3.1 +3.1 +2.0 +2.1 +4.8
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Rent sector costs edged up 0.3% during the month. On average, rental costs for non-controlled properties increased by 0.3%, while controlled properties lower electricity showed a 0.2% increase for the month. costs for The Education, Recreation & ReadMarch, down ing sector edged up 0.1% month-overClothing & Footwear advanced 0.5% 2.2%.” month. The increase in the average as new stocks of clothing were introduced in retail stores for the spring and sum- cost of boat repair and maintenance caused mer seasons. Average prices were higher for the sub-sector to rise by 4.0%. women’s clothing (1.0%); children’s clothing (0.4%); and infant’s clothing (1.8%). Fuel & Power contracted 2.1%.The Fuel Adjustment Clause (FAC) fell 12.9%. Households
Transport & Vehicles declined 0.4%. This resulted from a combination of lower “ Households airfares (-0.7%) and hotel accommodaexperienced tions (-0.8%).
110.6 113.6 116.9 119.6 123.4
112.1 114.6 116.9 118.6 121.0
107.8 109.9 112.5 114.4 116.5
104.3 105.5 106.9 107.5 109.5
100.8 104.8 114.1 117.5 119.1
101.5 109.8 108.5 107.6 112.8
108.7 111.3 113.7 116.6 119.2
112.6 115.8 121.0 123.4 128.9
115.1 119.9 125.3 132.0 139.7
123.0 128.1 133.1 139.6 149.4
118.1 117.9 118.0 118.2 118.5 119.1 119.2 119.6 119.6 119.7 120.1 120.9 121.0 121.2 121.5 121.6 121.8 123.0 123.1 123.4 123.3 123.8 124.7 125.0 125.0 125.1
117.1 117.2 117.4 117.5 117.8 118.1 118.3 118.9 118.8 119.1 119.1 119.2 119.4 119.4 119.6 119.6 119.6 119.7 120.0 121.6 121.6 121.8 121.9 122.0 122.3 122.4
113.2 113.3 113.4 113.8 113.9 114.0 114.1 114.2 114.3 114.3 114.5 115.4 115.4 115.5 115.6 115.7 115.9 116.1 116.2 116.3 116.5 116.8 117.1 117.2 117.3 117.4
107.2 107.2 107.2 107.3 107.2 107.2 107.2 107.4 107.4 107.4 107.8 107.8 107.8 107.8 107.8 107.8 109.1 109.1 109.4 109.4 109.4 109.4 110.7 110.8 110.8 110.8
116.9 117.0 117.0 117.1 117.1 117.2 117.3 117.2 117.3 117.3 117.4 118.0 118.4 118.3 118.2 118.5 119.1 119.3 119.3 119.3 119.2 119.2 119.1 119.3 119.3 119.3
108.5 105.6 104.1 102.6 104.2 104.3 106.1 108.4 109.2 108.3 110.1 110.5 111.2 112.0 111.6 111.9 112.6 113.1 113.7 114.2 114.2 114.2 114.1 110.4 111.6 112.1
115.1 115.1 115.5 115.6 115.6 115.8 115.8 116.5 116.8 116.8 117.2 117.7 117.7 117.7 118.2 118.2 118.3 118.4 118.4 118.4 118.4 119.4 120.5 120.9 120.5 120.4
122.1 121.1 121.8 122.5 123.2 123.0 122.9 123.0 122.9 123.4 122.4 124.9 125.0 126.0 127.1 127.5 127.7 129.0 128.3 128.2 127.2 128.9 129.5 131.4 130.7 130.9
130.4 130.5 130.5 130.6 130.7 130.7 130.9 130.9 130.9 130.9 134.1 134.6 134.5 134.6 134.8 135.1 135.3 138.3 138.4 138.4 138.6 138.6 144.3 144.4 144.9 144.9
134.2 134.2 134.2 134.2 134.3 140.3 140.2 141.0 141.0 141.0 141.3 142.5 142.5 142.5 142.7 142.7 142.7 150.7 151.0 151.4 151.4 151.4 151.6 152.3 152.3 152.3
Health & Personal Care posted an increase of 0.1%. Within the medical supplies subcomponent, self-prescribed medicines rose 0.4%. The price of cosmetics and toiletries increased by 0.1%. May 2004
Using the Index Numbers
= 125.1 - 125.0 x 100 The Department of Statistics receives numerous 125.0 calls daily requesting the rate of inflation over specific periods of time. The following calculations = 0.1% are provided to guide users as to how to compute annual rates of price increases. The index b) Year-to-Year Price Change (annual rate of inflation) The price change between December, 2002 and numbers used in the examples have been taken December, 2003 is calculated as follows: directly from the data table on page 3. a) Month-to-Month Price Change The price change between November and December, 2003 is calculated as follows: = Dec 03 index number - Nov 03 index number x 100 Nov 03 index number = Dec 03 index number - Dec 02 index number x 100 Dec 02 index number = 125.1 - 121.2 x 100 121.2 = 3.2%
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125.1 125.4 125.6 +0.2
122.5 122.8 123.3 +0.4
117.8 117.9 118.2 +0.3
110.8 110.8 111.4 +0.5
119.3 119.3 124.8 +4.6
111.0 113.9 111.5 -2.1
120.4 120.5 120.5 Nil
129.9 130.5 130.0 -0.4
145.1 145.4 145.5 +0.1
152.3 152.3 152.4 +0.1
-1.0
+1.9
+1.8
+7.5
+6.8