We had the CPI data from New Zealand earlier today:
Reserve Bank of New Zealand publish their own measure of inflation
- The RBNZ's key measure of core inflation is 'the sectoral factor model'
- comes in at 1.8% (prior was 1.8% also)
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The Sectoral Factor Model Inflation Gauge, in brief (summarised this from RBNZ info)
- Core inflation excludes one-off or highly volatile price movements
- Central banks use core inflation measures to assess what is happening to "underlying" inflation
- The Reserve Bank of New Zealand has a set of models that produce core inflation estimates
- The sectoral factor model estimates a measure of core inflation based on co-movements - the extent to which individual price series move together. It takes a sectoral approach , estimating core inflation based on two sets of prices: prices of tradable items, which are those either imported or exposed to international competition, and prices of non-tradable items, which are those produced domestically and not facing competition from imports
