Local prices up by double-digit for the third consecutive quarter

Pago Pago, AMERICAN SAMOA — The Food Group, and other typical expenses such as Housing and Transportation contributed to the 13.5% increase in American Samoa’s inflation rate for the third quarter of 2022 — July to September, according to a news release from the Commerce Department’s Statistics & Analysis Division.

“When the general price level rises, a unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money,” DOC explained.

“This is what we are seeing today in American Samoa: three quarters of 2022 with double-digit inflation – the latest at 13.5%. In other words, a dollar one year ago is now worth only $0.865,” it says.

According to DOC, American Samoa consumers are paying 13.5% more today for everyday goods than a year ago. And this is the “highest rate of price increases in the territory for more than 40 years ago,” said DOC referring to the period of 1979 to 1981.

“This means that you have less disposable income to spend on wants rather than needs. For others, rising prices can cause serious financial worries, especially with families with much less money to cover needed necessities,” the report further explained.

Besides the Food group, the DOC says that other consumer expenses such as Housing and Transportation have contributed to higher inflation. Although gas prices in the mainland had gone down, local gas prices this quarter increased by 10.7%.

“Point of Interest”, cited in the separate DOC CPI Newsletter for the third quarter, states that gas prices have increased since last quarter however, since the past month, they have decreased. It notes that the average unleaded price in August was $5.61 per gallon versus $5.33 in September.

Other points of interest cited in the newsletter are: the war in Ukraine has affected food commodities such as meat, oils and cereals; and, because of the recent pandemic and the associated financial assistance, consumers have been able to spend more.

“With an increase in demand, prices have no other way but up unless there is more supply,” said the newsletter.

FOOD GROUP

Food Group was the highest expenditure category for this quarter, an increase of 137.8 compared to the last quarter at 132.3. DOC said that food items that have increased across the board are onions (28.6%), cases of chicken (18.6%), and flour (14.9%).

It also says that food items that increased in most stores are eggs (18%), cooking oil (14.3%) and taro (16%).

However, some major retail stores showed no significant change in taro prices however, taro farmer- vendors have almost doubled their prices. “What used to be $10 for a bunch is now $20,” it says.

HOUSING GROUP

According to DOC, Housing was the fastest growing group, with a quarterly increase of 5.7%. And the 2 major items that contributed to the increase are rents — which is up by 8% — and electricity, up by 21%.

It says that a notable growth in an item that affects every household is electricity — included in the Housing Group which has shown a consistent increase throughout this year: up by 45.7% since the beginning of 2022.

Data included in the DOC report shows that fuel surcharges charged by the American Samoa Power Authority — based on a month of CPI survey — per kWh are as follow: 1st quarter of 2022 was $0.35; 2nd quarter $0.41; and 3rd quarter at $0.51.

“Five years ago (2017) the average monthly fuel surcharge was $0.20 per kWh. Electricity cost has gone up 2 and half times higher today than 5 years ago, according to DOC.

TRANSPORTION

While the Transportation Group increased this quarter by 2.5%, it was not as high as Food and Housing. The previous quarter increase in transportation was recorded at 5.4%.

“Although prices for gas in the [U.S] mainland are much lower than local prices, foreign sources of our fuel/oil, inevitable shipping costs and associated fees play a critical factor in determining fuel gas at the pumps,” DOC explains.

It says that the average retail unleaded fuel cost in the US is $3.78 compared to the local average of $5.33 a gallon.

EDUCATION AND COMMUNICATIONS

DOC says the Education and Communication group decreased this quarter (- 0.1%) and the main reason for decline is due to some reduction in retail prices for smartphones. Items such as smartphones and laptops will always change — gradually increase — as newer versions come out every year. Items such as these are part of this group, adjustments will be made shortly to include these product changes.

OTHER GROUPS

For Apparel, it registered a 0.9% quarterly increase. Items to have contributed to the increase are, footwear — both women’s and men’s up by more than 2%; infants footwear and clothing — both up 5%; and jewelry hiked 1%.

For Medical Care group, it increased by 0.7%. Since the beginning of this year, non-prescription drugs have been the main cause of increase for this group and continues to be the same for this quarter.

For the Recreational group, it is up overall by 1.9% this quarter. Items that have increased are again fishing equipment (14.5%), gym membership (6.6%) and speakers (4.7%). All other items have no significant changes.

For “Other Goods and Services” group, it increased by 1.9% this year. A few items have gone up contributing to this increase such as soap (up 9%), shampoo (3%), conditioner (4%), toothpaste (4%) and lastly haircuts, which are up by 30.7%.