Consumer price index, May 2016

The year-to-year CPI-ATE growth was 3.2 per cent in May, down 0.1 percentage points from April. The CPI was 144.3 (1998=100) in May 2016, compared to 139.6 in May 2015, which corresponds to a year-to-year growth of 3.4 per cent.

Monthly change: higher airfares, lower prices of books

The CPI rose 0.3 per cent from April to May. A contributing factor was increased airfares. Both domestic and international flights showed price increases this month. The price growth in May must be seen in conjunction with the measurement period for air travel coinciding with public holidays.

Prices of clothing and footwear rose for the fourth consecutive month; from April to March prices increased 0.5 per cent. From April to May, food prices rose; fruits and vegetables were the main contributors to the increase, while meats and dairy products dampened the growth. Imported agricultural showed a price increase of 1.6 per cent while prices of Norwegian agricultural products remained unchanged from the previous month. From April to May price growths were also measured for accommodation services and electricity including grid rent.

Prices of books fell 10.8 per cent from April to May, thus dampening the CPI growth. The decline in book prices in May is no surprise as the maximum discounts set for books with a release date the previous year expire every year on 1 May as described in the Norwegian “book agreement”. In the same period also prices of auto diesel and household textiles fell.

Year-to-year growth: higher electricity prices, lower fuel prices

The CPI rose 3.4 per cent from May 2015 to May 2016. Higher electricity prices were the largest contributor to the year-to-year growth. Prices on electricity including grid rent showed a year-to-year increase of 17.6 per cent, and this is the highest year-over-year change since October 2013. The CPI excluding electricity (CPI-AEL) increased by 2.9 per cent from May 2015 to May 2016. This implies that the price on electricity including grid rent pulls the year-to-year growth of the CPI up by 0.5 percentage points.

The division furnishings, household equipment and routine maintenance increased 6.4 per cent year-to-year. The main contributors to the increase were higher prices of furniture and furnishings, carpets and other floor coverings together with household textiles. Airfares rose 27.2 per cent the last twelve months while prices of clothing rose 5.0 per cent in the same period.

The year-to-year growth was mainly dampened by lower fuel prices. Prices of petrol and auto diesel fell 3.0 and 6.9 per cent respectively the last twelve months.

Change in the year-to-year growth: CPI growth rate up 0.2 percentage points

The year-to-year growth in the CPI increased from 3.2 per cent in April to 3.4 per cent in May, while the year-to-year growth rate in the CPI-ATE fell from 3.3 per cent in April to 3.2 per cent in May. The increased growth rate in the CPI was mainly due to the development in electricity prices. Electricity including grid rent went up 0.4 per cent from April to May this year while they fell 4.1 per cent in the same period last year. The development of airfares and prices of household textiles also contributed to the increased CPI growth rate.

The price development of food pulled the growth rate in the opposite direction; food prices rose 0.2 per cent from April to May 2016 compared to an increase of 1.8 per cent in the same period in 2015.