Fundamentals of Business & Financial Journalism

All,

Following is an actual press release (which I’ve edited a bit) from the Hong Kong government on the local Consumer Price Index for October. You might also want to look at these tables which will give you an idea of the actual components of Hong Kong’s CPI basket and their relative weights in that basket.

Based on these materials, please write a news story of no more than seven paragraphs in Microsoft Word and upload it using the buttons below. The name of your file should be your student number (and ONLY your student number) followed by .doc or .docx. The deadline for submitting this assignment is noon on Nov. 22.

Consumer Price Indices for September 2012

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The Census and Statistics Department (C&SD) released today (October 22) the Consumer Price Index (CPI) figures for September 2012. According to the Composite CPI, overall consumer prices rose by 3.8% in September 2012 over the same month a year earlier, slightly larger than the corresponding increase (3.7%) in August 2012.

On a seasonally adjusted basis, the average monthly rate of change in the Composite CPI for the 3-month period from July to September 2012 was -0.6%, and that for the 3-month period from June to August 2012 was -0.7%.

Analysed by sub-index, the year-on-year rates of increase in the CPI(A), CPI(B) and CPI(C) were 4.3%, 3.9% and 3.3% respectively in September 2012, which compared to 4.1%, 3.8% and 3.2% respectively in August.

On a seasonally adjusted basis, for the 3-month period from July to September 2012, the average monthly rates of change in the seasonally adjusted CPI(A), CPI(B) and CPI(C) were -1.9%, virtually nil and 0.2% respectively. The corresponding rates of change for the 3-month period from June to August 2012 were -2.1%, -0.2% and 0.1%.

Amongst the various CPI components, year-on-year increases in prices were recorded in September 2012 for housing (5.6% in the Composite CPI and 6.9% in the CPI(A)); meals bought away from home (5.1% in the Composite CPI and 5.3% in the CPI(A)); electricity, gas and water (3.7% in the Composite CPI and 3.0% in the CPI(A)); food (excluding meals bought away from home) (3.4% in the Composite CPI and 3.5% in the CPI(A)); miscellaneous services (3.0% in the Composite CPI and 2.1% in the CPI(A)); transport (2.1% in the Composite CPI and 1.5% in the CPI(A)); clothing and footwear (2.0% in the Composite CPI and 3.7% in the CPI(A)); miscellaneous goods (1.2% in the Composite CPI and 2.4% in the CPI(A)) and alcoholic drinks and tobacco (0.7% in the Composite CPI and 0.9% in the CPI(A)).

On the other hand, year-on-year decrease in prices was recorded in September 2012 for durable goods (-1.4% in the Composite CPI and -1.9% in the CPI(A)).

Taking the first nine months of 2012 together, the Composite CPI rose by 4.2% over a year earlier. The corresponding increases in the CPI(A), CPI(B) and CPI(C) were 3.4%, 4.6% and 4.4%.

In the third quarter of 2012, the Composite CPI rose by 3.1% over a year earlier, while the CPI(A), CPI(B) and CPI(C) rose by 1.9%, 3.7% and 3.4% respectively.

For the 12 months ended September 2012, the Composite CPI was on average 4.6% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 3.9%, 4.9% and 4.8%.

Commentary

A Government spokesman said that underlying inflation increased slightly in September, due mainly to the increases in public housing rentals and charges for household services. The prices of many other major CPI components, including food in particular, actually continued to show slower year-on-year increases.

The spokesman commented further that, looking ahead, the austere economic environment and more moderate increases in import prices should help to contain inflation in the rest of the year. Nonetheless, the volatility of food and commodity prices amid abundant global liquidity is an area to watch over. The Government will continue to closely monitor the inflation situation, particularly its impact on the lower-income people.

You are a reporter working for the largest daily newspaper in the tiny island nation of Youthanesia, Asia’s youngest and smallest country located in an obscure corner of Melanesia. Your job is to cover the local economy, which is heavily dependent on the manufacture of widgets for export to larger, wealthier countries. Around 40% of the population of Youthenasia work in widget factories owned by the world’s two largest widget makers.

For the past week, you have been polling local economists on their forecasts for gross domestic product growth in the just-ended third quarter (the three months ended Oct. 31). The average (mean) of the 12 forecasts you obtained is for real GDP growth of 7% from the year-earlier period. The forecasts ranged from 2% growth to 12% growth.

Using the following information, please write a story (of no more than seven paragraphs) for immediate publication on your newspaper’s Web site. At the end of your story please list any questions you’d like to ask the government’s Economy Minister at a press conference scheduled for later in the day.

Please write your story in Microsoft Word and upload it using the buttons below. The name of your file should be your student number (and ONLY your student number) followed by .doc or .docx. The deadline for submitting this assignment is noon on Nov. 15.

Today (Nov. 14), the government’s Central Statistics & Actuarial Bureau issued the following statement:

“Her Serene Majesty’s Government of Youthenasia is pleased to announce that third-quarter gross domestic product soared 10.9% from a year ago on a nominal and provisional basis, a substantial acceleration 8.8% growth in the year-earlier period. Adjusting for inflation, real GDP grew by 6.8% in the third quarter, compared with real GDP growth of 7.2% in the same quarter a year earlier. Seasonally-adjusted and annualized quarterly figures will be announced next month, along with our final revision of third-quarter GDP data.

Widgets remain the cornerstone of our economy, and we have benefited from the worldwide boom in widget sales over the past year. In the third quarter, the widget industry accounted for six percentage points of economic growth. To be sure, the government’s program to diversify the economy by promoting tourism has been extremely successful, with 30,000 overseas visitors arriving in our country in the past three months, up from just 15,000 in the year-earlier period. Hotel occupancy is now nearing 90%. However, the government’s efforts to promote medical tourism have been negatively impacted by several unfortunate recent events at the Royal Youthenasia Hospital. We expect that a new US$10 million advertising campaign in overseas newspapers will help the local medical tourism sector rebound.

While inflation has accelerated slightly over the past few quarters, prices have risen only 3.8% in the third-quarter from a year earlier – a level which Her Serene Majesty’s Government considers acceptable.”

After the announcement, you call two local economists for comment to put in your first version of the story for the newspaper’s Web site.

Frieda Bacon, economist at the government-run Royal Institute for Global Economic Research:

“The numbers are pretty good, and above my expectations, but the government still has a long way to go in reducing the dependence on exports. I’d like to see them do more to boost the tourism sector. That sector still only accounts for about 8% of the overall economy.”

Jeremiah Kervorkian, chief economist at Churn & Burn Securities:

“Inflation is still a problem here, and matters were made even worse by the large pay rise announced by International Widgets earlier in the year. This has flooded the local economy with extra cash. Inflation is now almost 4%, and that’s considerably higher than the 1.8% we saw in last year’s third quarter and even higher than the 3.5% recorded in the second quarter.”

All,

Here is an example of one (extremely good) way to complete last week’s tutorial.

Best, Jeff

All,

Here are the examples I cited for the last two tutorials.

Tutorial 4

Tutorial 5

Best,
Jeff