"There remains the risk of a further cut in 2017, but this CPI outcome does not add to the case for such a move," said ASB chief economist Nick Tuffley said.
The Reserve Bank has a mandate to keep inflation between 1 and 3 per cent - a band it has not been in for two years.
But while the CPI data does provide some cause for concern at the Reserve Bank it is often met with scepticism by those who feel it doesn't reflect real household costs.
The Consumers Price Index is designed primarily as a macro-economic tool for the Reserve Bank to base policy around, said Statistics New Zealand's consumer prices manager Matt Haigh.
That is why it doesn't include average house price data - one of the biggest criticisms of the data.
"It's not a value judgement that house prices aren't important," Haigh said.
But because Reserve Bank policy can directly influence house prices there was a risk that of a "circularity".
"You could end up chasing your tail," he said.
Meanwhile, the Household Living-costs Price Index (HLPI) gets much less attention from economists but has been designed over the past three years to reflect the fact that real world inflation varies greatly depending on your household wealth and expenditure, Haigh said.
It offers data for specific sub-sections of New Zealand such as beneficiaries, Maori, superannuitants, five different income groupings and five expenditure groups.
In doing so it captures inequalities of price inflation which the CPI does not.
So for example rent, which was up 3.4 per cent for the year in Auckland, is factored into the CPI with a weighting of 10 per cent.
But, said Haigh, in reality for many renters it is likely to be more like 40 per cent of total expenditure.
That weighting is more accurately reflected in the HLPI - especially in the lower income groups.
Conversely many of the goods and services which are experiencing the biggest price falls are those which people with more discretionary income spend their money on - electronic gadgets, big TVs and overseas holidays.
The HLPI also includes mortgage interest costs in its data set so does capture slightly more upward pressure for households borrowing more to meet house prices.
On November 8 Statistics New Zealand will provide its first live quarterly update for the HLPI data, with details for the year to September, and it should provide more insight for those looking at inflation from a social or political perspective.
Backdated HLPI data for the year to September 2015 is already available on the Statistics NZ website.