By David Hargreaves
Statistics NZ has corrected its consumers price index (CPI) figures for the September 2016 quarter, having discovered a "manual processing error" around measurement of lower ACC levies for light vehicles.
As a result, the quarterly CPI change in the September 2016 quarter is now given as 0.3%, having previously been published as 0.2%.
The annual change in CPI for the year to the September 2016 quarter moves to 0.4% from the previously published figure of 0.2%.
"The changes were required to correct a manual processing error discovered by Statistics NZ. The error affected prices for vehicle relicensing fees, within the transport group. There is a flow-on effect on the non-tradable index. The index for non-tradables less government charges is unaffected," Stats NZ said.
"Statistics NZ is confident that the correction only affects the September 2016 quarter index numbers, as it occurred in our measurement of lower ACC levies for light vehicles that came into effect during the quarter.
"Following our protocols for errors, Statistics NZ has decided to correct the CPI now to ensure our customers have the best possible information to inform their decisions. We have already notified the Reserve Bank of these changes ahead of its OCR announcement on Thursday this week. We also notified the Treasury ahead of its next Half Year Economic and Fiscal Update (HYEFU).
"Statistics NZ apologises for any inconvenience caused by this error."
| Series | September 2016 quarter | |||
| Quarterly (%) | Annual (%) | |||
| Originally published | Corrected | Originally published | Corrected | |
| CPI | 0.2 | 0.3 | 0.2 | 0.4 |
| Non-tradables | 0.3 | 0.5 | 2.1 | 2.4 |
| Transport | -3.0 | -1.9 | -6.7 | -5.6 |
The interesting thing about this upward correction is that it adds to inflation figures that were, as originally stated, actually higher than economists' forecasts.
It's unlikely the upward revision to inflation will stop the RBNZ from cutting interest rates via the Official Cash Rate on Thursday to an expected new record low of 1.75%
However, the revision does have ramifications for the RBNZ's forecasts in its accompanying Monetary Policy Statement - and for the given timeframe in which the RBNZ may be able to get inflation back more toward its explicit 2% target.
34 Comments
I've posted in the past about how crap Stats NZ is. The only responses I received were defending Stats NZ on the quality of their work and their integrity. They are managed in a politically motivated manner these days.
It isn't just critical errors but manipulation of statistics.
Stats NZ was also aware of a spike in the NZD just prior to the release of the October 18 CPI data, issuing a statement that all procedures had been followed .(given the size of spike and liquidity only a significant market player could have moved the currency in such a manner) The reality , if the 'true' numbers had been released on the day , the NZD would have gone thru 73 cents, the other reality is Stats NZ is underfunded and if you wish to frontrun the data release there appears ample opportunity to do so.
The fastest growing trend in NZ: processing errors. We are facing several incidents every week, starting with this StatsNZ error, wrong banking transactions by Harmoney, leading to an inability to produce a correct September statement (still waiting), NZX not being able to finalise electricity SPOT market prices for Oct 16 - 20, Placemakers sending out completely wrong loyalty card balances, Novopay errors, the list goes on with no end in sight. No wonder our NZ GDP per hour worked is flat lining and the second worst in the OECD. It's embarrassing indeed. Perhaps time to stop bragging how good we are and focus on quality and accuracy instead?
As a person that has dealt with reporting, stats, and analysis at several large companies. I can say that often it is not the workers (there are exceptions of course). Most people I have seen in these positions do care about their work - usually more so than the management above them, and believe it or not most are actually quite well paid for the role they are in (although again some may disagree)
The issue tends to be poorly conceived bespoke systems (Because every company in NZ is so unique that no one else in the world has ever thought of that idea before and an off the shelf system could never work).
These systems then cost exorbitant amounts of money to change/update. So every time the business rules, contracts, or one-off event changes things, they implement workarounds outside of the system. Usually based around excel, or worse still MS access.
Said workarounds are usually a lot more than a simple one-calc workbook, they are complex micro systems that are never tested, vetted, or have ongoing support.
They are prone to breaking, corrupting, and worst of all unqualified tampering (queue temp/untrained newbie/manager/I can do it better type.
So yes, your conclusion is right, but the methodology not quite there ;-)
I don't mind being wrong about things. Bespoke systems/software are a significant problem in a lot of sectors. The special snowflake approach to developing systems relates to poor management decisions or some company has done a sales job on ignorant managers.
I have also directly seen systems be implemented to replace human decision making but the person implementing the system has little or no understanding, of course no one seems to studying general systems theory these days. This of course always leads to untested and unverified implementation. Of course management trusts these untested systems even though they operate on GIGO and ignore feedback indicating systems failure.
Of course find all of this to be terrible as I come from the field where the person operating the software is expected to be an expert rather than a poorly trained and unsupervised technician.
Agree that price/margin/pay is only one aspect, and not necessarily directly applicable to StatsNZ, but certainly is applicable to other industries. What's my main concern is that an increasing number of critical systems (banking, utilities, etc.) are poorly conceived. It's a bit like a builder who does shoddy work and ends up working more and more of his hours on non-chargeable warranty jobs. Perhaps there lies the root cause for our GDP per hour worked flat-lining?
I agree with that as well.
From what I have seen, the problem tends to stem from the Execs/CEO level. Many are now professional CEOs/Executive managers. I.e. they aren't natural leaders involved with the business, rather they swap companies from one top job to the next.
Boards/recruiters seems to think that good networking, reading reports/financial statements, and having a good face for the annual report/presentation is all that matters in top leadership. Actual business knowledge and leadership qualities seem to be overlooked.
End result is that most CEOs and execs do not have the critical understanding of the business to make effective and efficient decisions.
They then choose systems etc based on what their "networks" say they should have, rather than what the guys on the ground say they actually need.
Yes, I have observed that also. Chasing short term gains, then move on before blame can be laid. But someone is hiring these managers too. What happened to good old fashioned long term solid business practices? And it seems that countries like Germany, which have a quality focus, manage to work less hours yet grow more than us. It beat's me why we are seen as the rock-star economy based on some misleading figures of migrant-based growth.
Not just the CEOs ...out of step with reality.
Our Dear Leader has just added another 300billion to the pot, to fix the Housing problem, he actually created and only just...admitted....Finally needed fixing...
Must have conceded defeat.?? Must have finally woken up.?? or someone did.
If you add the 24 million that he in "Particular" as it was his particular fetish ...wasted on a flag and all the other wasted benefits of the past few years of his rule, we could have given away, even more.
And helped our import quotas.
A free-be mini-mobile-house, plus a free second hand Mini-estate-car and all imported readily in kit-set form, from our mates rates from overseas....interests.
You could tow, one with the other....if sensibly proportioned.
Have some not seen the simple designs, for simple people, who do not want a huge McMansion of their own, and never really aspired to one.
A simple step on the first rung of the ladder.
A simple thing, like a caravan, a mobile home, a shipping container double glazed, in all its glory....A stack of em if necessary.
Watch TV....it is unbelievable, what one can achieve, if one truly wants to fix a temporary housing problem.
Then they could have the relatives to stay, whenever they come simply visiting. Relatively simple. solution.... I call em tents, Yurts, whatever...
Maybe we should all become gypsies and move from pillar to post....much easier than changing the minds of all those who want a McMansion...in Awkland....and the Prime suspects, who want em.,,for Capital Gain.
Wouldn't you say...like me...Simple.
Totally agree Noncents.
Typically processes are designed by management. Individuals running processes have little control of the wider system within which they operate. When something goes wrong we tend to blame people - without truly understanding the causes of said problems.
One of the biggest problems is we throw IT at processes before we refine them. If we made our processes work well, iteratively designed and tested by those in the work, before getting IT, we'd have quality processes. And, we'd have fit for purpose systems.
Hard to get inflation when you have a Eurodollar crisis on your hands
http://www.telegraph.co.uk/business/2016/10/30/economic-stress-as-world…
Two questions arise regarding the liquidity of the Euromarket: Who lends if the supply of Eurodollars dries up? Who lends if the solvency of a major bank in the Euromarket is threatened? The dollars don't disappear, but it’s possible that holders of Eurodollar deposits could move them back to banks in New York. Thus Eurobanks could face a liquidity crisis. To protect against any such risk, many have negotiated standby lines with U.S. banks.
http://wfhummel.net/eurodollars.html
Yvil,
It's ok not to know what a Eurodollar is,but it's a little bizarre to then insist that there is no such thing,
They have been around since not long after WW2. I won't bother you with the detail,but essentially,they are US Dollar denominated deposits at banks outwith the US,or in overseas branches of US banks.
Wot...our major customer, in serious decline.....No names, no pack-drill. AJ.
I decline to take parts from them too....never know where they have been.
http://www.theepochtimes.com/n3/2180017-six-ways-to-stop-organ-harvesti…
Talking of reserving judgement....statistically speaking...off course. Shock ..Horror.
http://www.telegraph.co.uk/business/2016/11/06/world-currency-markets-b…
Time for a change of pace......Quick...get rid of the problem.....Well maybe...Not.
Statistically..impossible.
China replaces finance minister Lou Jiwei
The Chinese government has replaced its finance minister, removing one of the country’s most outspoken reformists at a time of global concern over the country’s economic slowdown.
Lou Jiwei will be replaced by Xiao Jie, state news agency Xinhua reported, citing an announcement from the Standing Committee of the National People’s Congress, China’s parliament. Read more
could not agree more CPI is weighted wrong
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=117…
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.