Which Of The Following Does Consumption Rely On To Provide Goods And Services:

Consumer Price Alphabetize FAQs

ABOUT THE CPI
Q. What is a Consumer Price Index (CPI)?
Q. How tin can I find the CPI data?
Q. How is the CPI used?
Q. When was the CPI first produced in Australia?
Q. Why doesn't the CPI reflect the prices I see?
Q. What geographic regions does the CPI encompass?

Cost OF LIVING
Q. Is the CPI the best mensurate of inflation?
Q. Is the CPI a cost of living index?
Q. What was the modify to the Australian CPI main purpose in 1998?
Q. What are the Selected Living Cost Indexes (SLCIs) and how do they compare with the CPI?

CPI CONSTRUCTION
Q. How is the CPI basket determined?
Q. What goods and services does the CPI cover?
Q. How and where are CPI prices nerveless?
Q. How are transactions information used in the CPI?
Q. How is the CPI calculated?
Q. How is the CPI reviewed?
Q. Why are in that location quality adjustments in the CPI?
Q. How are taxes treated in the CPI?
Q. How are subsidies treated in the CPI?

INTERPRETING CPI RESULTS
Q. How do I read or interpret a price index?
Q. How can I use a toll alphabetize to calculate the change in prices between whatever ii points in time?
Q. How practise I calculate changes in the CPI between agenda or financial years?
Q. What index should I apply for contract escalation?
Q. Can I compare cost levels using price indexes?
Q. Why doesn't the ABS adjust the CPI when in that location are i-off toll spikes (like bananas, or introduction of the GST)?
Q. How was child intendance calculated in September quarter 2020 and June quarter 2020?

Belittling MEASURES OF INFLATION
Q. Is the CPI seasonally adjusted?
Q. What is the deviation betwixt the "headline aggrandizement" and the "underlying inflation" reported in the media?

FURTHER INFORMATION
Q. The ABS previously published average retail prices for selected items for each capital metropolis. Why are they no longer bachelor?
Q. What information is published with the CPI?
Q. What if I desire more detailed information?
Q. What are some limitations of the CPI?
Q. Will the CPI be updated in the time to come?
Q. How tin I go data on the CPI?

INTRODUCTION OF CARBON PRICING
Q. Does the ABS produce a carbon exclusive Consumer Price Index (CPI) and/or Living Cost Indexes?
Q. How was the carbon price reflected in the CPI and/or Living Cost Indexes?

WHAT ROLE DOES HOUSING PLAY IN THE CPI
Q. Does the ABS include housing in the CPI and/or Living Cost Indexes?

ABOUT THE CPI

Q. What is a Consumer Price Index (CPI)?

A. A CPI is a measure of the average alter over time in the prices paid by households for a fixed handbasket of goods and services.

In Commonwealth of australia, the CPI measures the changes in the price of a fixed basket of goods and services, acquired by household consumers who are resident in the viii Land/Territory capital cities.

A general overview of the CPI is available in

A Guide to the Consumer Price Alphabetize: 17th Serial, 2017 (cat. no. 6440.0), department 2 "What is the CPI?". More detailed information is available in Consumer Price Index: Concepts, Sources and Methods (cat. no. 6461.0), Affiliate 2 "Purpose and uses of Consumer Price Indexes".

Q. How can I find the CPI data?

A. The headline CPI numbers, percentage alter from the previous quarter, and percent change from corresponding quarter of the previous year, for the weighted boilerplate of eight capital cities can be found in the Principal Features, Consumer Cost Index, Australia (true cat. no. 6401.0). The CPI index

numbers and percentage changes for each capital letter city for the latest and previous quarters can be found in the Selected Tables - Capital Cities, Consumer Cost Index, Australia (cat. no. 6401.0).

The Downloads tab, Consumer Price Index, Australia (cat. no. 6401.0) contains price indexes for each State and Territory uppercase metropolis and more detailed production details, their percentage changes, and the relative contribution of these indexes to the change in the All Groups indexes. These detailed tables are available equally Microsoft Excel time series spreadsheets, and summarised in the Adobe Acrobat pdf file.

Q. How is the CPI used?

A. The CPI affects almost all Australians because of the many means information technology is used. It is primarily used every bit a macro-economic indicator by the regime and economists to monitor and evaluate levels of inflation in the Australian economic system, and for adjusting dollar values of types of fixed payments, such as pensions and contracts.

A general overview of the CPI and its uses is available in A Guide to the Consumer Price Alphabetize: 17th Series, 2017 (true cat. no. 6440.0), section 2 "What is the CPI?".

Q. When was the CPI kickoff produced in Australia?

A. The CPI was offset compiled in 1960 with the series extending back to the September quarter 1948. The CPI was preceded by five serial of retail price indexes compiled past the (and so) Republic Bureau of Demography and Statistics every bit far dorsum as 1901. These series were titled the A, B, C, and D Series, and the Interim Retail Price Index respectively. The C Series Index, which began in 1921, was the principal retail price index in Commonwealth of australia prior to the introduction of the CPI in 1960.

The introduction of the CPI heralded a change in the arroyo to measuring retail price movements. Rather than compiling a set of discrete fixed-weighted indexes, the objective became to produce a series of short-term fixed-weighted indexes that were to be regularly linked together to provide a single continuous measure of cost alter. This strategy was adopted to ensure that, at any point in time, the weighting patterns and particular coverage of the CPI were relevant to user requirements and reflected contemporary economical weather condition equally well equally possible. The CPI now comprises seventeen linked indexes. The CPI originally consisted of weights from 1948. Weights were updated in 1952 and subsequently in 1956, 1960, 1963, 1968, 1973, 1974, 1976, 1982, 1987, 1992, 1998, 2000, 2005, 2011 and 2017. From 2018 the CPI weights will be updated annually.

For the 13th series CPI in 1998 information technology was decided that the CPI would change from a measure out of the change in living costs of employee households to a general measure of price inflation for the household sector. Consequently the population coverage was expanded from wage and salary earner households to include all metropolitan households.

For more information on the history of the CPI encounter the feature article 70 years of the Australian Consumer Price Alphabetize, Sep 2018 (cat. no. 6401.0).

Q. Why doesn't the CPI reflect the prices I meet?

A. The CPI measures the changes in price of a fixed handbasket of appurtenances and services based on average household expenditure by upper-case letter city households across Commonwealth of australia, not of whatever specific family unit or individual. For example, it includes both rental and owner–occupier house purchase costs in the handbasket, which is unlikely for a single household. It is unlikely that any individual experience volition correspond precisely with either the national index or the indexes for specific majuscule cities.

More information is available in

Consumer Price Index: Concepts, Sources and Methods (cat. no. 6461.0), Affiliate 5 "Coverage and classifications".

Q. What geographic regions does the CPI embrace?

A. Indexes are published for each of the eight State and Territory capital cities as divers by the Greater Uppercase City Statistical Area in the Australian Statistical Geography Standard (ASGS), and for the weighted average of the eight capital cities.

For more data, refer to product Consumer Price Index: Concepts, Sources and Methods (true cat. no. 6461.0), Chapter 5 "Coverage and classifications", or the Australian Statistical Geography Standard (ASGS): Volume 1 - Primary Structure and Greater Capital Urban center Statistical Areas, July 2011

(true cat. no. 1270.0.55.001).

COST OF LIVING

Q. Is the CPI the all-time mensurate of aggrandizement?

A. At that place is no unmarried all-time measure of inflation. Ideally, such an indicator would be comprehensive and cover toll changes for all goods and services traded in the economy. However, different measures of cost change are suited to analysing different parts of the economy, so the best approach depends on how the data is going to be used.

The ABS produces a range of price indexes, suited to different parts of the economy. For example:

the Consumer Price Index (CPI) is the virtually comprehensive measure of appurtenances and services price inflation faced by all consumer households;
the Selected Living Cost Indexes (SLCIs) are designed to measure changes in living costs for selected population sub-groups. They are specially suited for assessing whether or not the disposable incomes of households have kept pace with price changes.
the Producer Price Index (PPI) measures inflation of products either as they get out the place of production or as they enter the production process;
the International Merchandise Price Index (ITPI) measures changes in the prices paid for imports of merchandise that are landed in Australia each quarter (the Import Price Index (IPI)) and the prices received for exports of merchandise that are shipped from Commonwealth of australia each quarter (the Export Cost Index (EPI));
the Wage Price Index (WPI) measures changes in the price of labour in the Australian labour market, and
the Implicit Toll Deflator (IPD) for Domestic Terminal Demand is used as a measure of aggrandizement experienced by consumers, governments and other domestic institutions.

The Australian CPI is measured on an acquisitions approach. This arroyo is considered to exist the nigh suitable approach when the principal purpose of the CPI is as a macro-economical indicator of cost aggrandizement affecting households.

For more information almost direct and derived measures of price change, refer to Consumer Cost Alphabetize: Concepts, Sources and Methods (cat. no. 6461.0), Chapter 14 "The system of price statistics".

Q. Is the CPI a cost of living alphabetize?

A. The CPI frequently is called a toll of living alphabetize, but it differs in important ways from a complete toll-of-living measure out. Both the CPI and a price of living index measure the changes in prices of goods and services that are purchased by households. The Australian CPI measures the changes in toll of a fixed basket of goods and services whereas a cost of living alphabetize measures the change in the minimum expenditure needed to maintain a certain standard of living.

In practise, no statistical agencies compile true cost of living or purchasing power measures as it is too difficult to practice. A toll of living index requires admission to both cost and electric current household consumption each period, also as an assessment of households' welfare which depends on a variety of physical and social factors that have no connection with prices.

Every bit the CPI is intended to measure the overall inflation in prices of goods and services caused by Australian households, information technology is used as a proxy measure of cost of living or purchasing ability.

More data is available in Consumer Toll Index: Concepts, Sources and Methods (cat. no. 6461.0), Affiliate four "Toll Index Theory".

Q. What was the modify to the Australian CPI principal purpose in 1998?

A. The Australian CPI is an important economic indicator. It measures price changes facing households. It is compiled according to international standards, and is based on robust information collection and compilation methodologies.

Prior to the September quarter 1998, the CPI was compiled primarily to be used for income aligning through wage indexation. This had implications for the coverage and blueprint of the alphabetize. It was limited to the expenditures fabricated by households whose principal source of income was wages. It measured out-of-pocket living expenses, including mortgage involvement payments.

Since the September quarter 1998, the principal purpose of the CPI has been to mensurate inflation faced by households to support macro-economic policy conclusion making. The CPI covers the expenditures of all households (not just those whose master source of income is wages, every bit was the case earlier 1998) and measures the changes in the prices of a fixed basket of goods and services acquired each menses.

In recognition of the involvement in the extent to which the touch on of price change varies across different groups in the customs, in add-on to the CPI, the ABS compiles Selected Living Toll Indexes, Australia (cat. no. 6467.0) (SLCIs).

The SLCIs measure-of-pocket living expenses incurred by selected population sub-groups of Australian households. The most notable divergence betwixt these indexes and the CPI is that the living cost indexes include involvement charges only do not include new house purchases, while the CPI includes new house purchases but does not include interest charges. For more than information refer to the Explanatory Notes inside the Selected Living Cost Indexes, Australia (cat. no. 6467.0).

The ABS compiles the CPI and a range of other indexes co-ordinate to agreed standards and to high quality. The CPI is used for a variety of purposes. The ABS provides explanations of the master purpose and the concepts, sources and methods used in compiling the CPI and other indexes. Based on this data, information technology is up to users to determine which alphabetize is the best to utilize. The ABS neither endorses nor discourages these choices.

More than information regarding the reasons for the change to the CPI is available in Information Newspaper: Outcome of the 13th Series Australian Consumer Price Index Review, 1997 (cat. no. 6453.0).

Q. What are the Selected Living Toll Indexes (SLCIs) and how do they compare with the CPI?

A. As a single alphabetize cannot exist expected to fairly fulfil all purposes, and in recognition of the widespread interest in the extent to which the touch of price modify varies across different groups in the community, the ABS compiles and publishes Selected Living Toll Indexes, Australia (cat. no. 6467.0), specifically designed to measure changes in living costs for selected population sub-groups. They are particularly suited for assessing whether or non the disposable incomes of households accept kept step with price changes. The employee households living cost index is calculated on a similar basis as the CPI prior to the September quarter 1998.

The SLCIs are constructed using the "Outlays method" which measures changes in the prices of goods or services for which payments were fabricated to proceeds admission to appurtenances and services i.e. the purchasing power of the after-revenue enhancement incomes of households. It is therefore concerned with measuring the affect of changes in prices on the out-of-pocket expenses incurred by households to gain access to consumer goods and services.

In contrast, the CPI uses the "Acquisitions method" which measures changes in the prices of goods and services acquired (actually received). As such, it is designed to measure price aggrandizement for the household sector every bit a whole.

In practice, for most goods and services purchased by the reference population, outlays and acquisitions occur inside a relatively brusk space of time, leading to no deviation in methodology. However, there are iii areas of expenditure in which these conceptual approaches provide significantly dissimilar results: purchase of dwellings, purchase of durable items and financial services and the employ of credit. The virtually notable differences caused past this are that living price indexes include interest charges simply do non include new house purchases, while the CPI includes new house purchases but does not include involvement charges. For more information refer to the Explanatory Notes within the Selected Living Cost Indexes, Australia (cat. no. 6467.0).

Households accept been categorised based on the principal source of household income, derived from the 2015-sixteen Household Expenditure Survey (HES). The iv household types in telescopic of the HES account for over 90% of Australian households. The four household types that take been identified as existence advisable for the structure of these indexes, are:

Employee households (i.e. those households whose primary source of income is from wages and salaries);
Age pensioner households (i.e. those households whose primary source of income is the age alimony or veterans affairs pension);
Other government transfer recipient households (i.e. those households whose master source of income is a government alimony or benefit other than the age pension or veterans affairs pension); and
Self-funded retiree households (i.e. those households whose principal source of income is superannuation or property income and where the HES divers reference person is 'retired' (not in the labour forcefulness and over 55 years of age).

The Pensioner and Casher Living Cost Index (PBLCI) was introduced in the June quarter 2009 and is a measure of the effect of changes in prices on the out-of-pocket living expenses experienced by the following two groups of households in the Australian population:

Age pensioner households, and
Other government transfer recipient households.

For the latest statistics on living price indexes, refer to the product Selected Living Cost Indexes, Australia (true cat. no. 6467.0).

CPI Construction

Q. How is the CPI basket adamant?

A. The CPI basket is based on actual household expenditure data, which is principally derived from the HES conducted by the ABS. The HES collects detailed information about the expenditure, income, assets, liabilities and household characteristics from a sample of simply under 8,000 households resident in private dwellings in the 8 uppercase cities.

In addition to the HES, market place expenditure and sales data is routinely monitored and applied to ensure the price samples proceed to be representative beneath the published level of data.

For more information, refer to

Consumer Price Index: Concepts, Sources and Methods (cat. no. 6461.0), Chapter 6 "Weights and their sources", and Consumer Price Index: Correspondence with 2015-xvi Household Expenditure Classification, Commonwealth of australia, 2017 (cat. no. 6446.0.55.001).

For data on the HES, refer to Household Expenditure Survey, Australia: Summary of Results, 2015-16

(true cat. no. 6530.0).

Q. What goods and services does the CPI encompass?

A. The basket contains representative items actually acquired past households. The actual items priced for the CPI basket are determined based on a number of factors. Items:

must exist representative of purchases made past the CPI population group;
must be identifiable and specific commodities or services (due east.g. a 420g can of baked beans, or adult general access to a football game); and
are not excluded because of moral or social judgements.

For practical reasons, the basket cannot include every item bought by households, but those it does include are carefully selected to represent the range of goods and services actually acquired by households. Selection is made only after obtaining detailed information about the buying habits of households, such as varieties and brands. The items selected should be representative, so that the index volition reverberate the price changes for a much wider range of goods and services than is actually priced.

Typical examples of the types of appurtenances and services represented in the basket can be found in A Guide to the Consumer Price Alphabetize: 17th Serial, 2017 (cat. no. 6440.0), Appendix 2 "Examples of appurtenances and services priced in the 17th Series CPI".

For more than information, refer to Consumer Toll Index: Concepts, Sources and Methods (cat. no. 6461.0), Chapter 5 "Coverage and classifications", and Chapter seven "Sampling".

Q. How and where are CPI prices collected?

A. The collection of prices in each capital city is carried out past trained ABS staff operating out of the various State and Territory offices of the ABS, while some prices are collected equally administrative datasets or special surveys. Transactions data was introduced into the CPI in the March quarter 2014 and is predominantly used for food and not-alcoholic beverages, tobacco, automotive fuel, and non-durable household appurtenances. From the December quarter 2017, the ABS has implemented a new method to make greater use of transactions data to compile the Australian CPI. This new method, known as a multilateral alphabetize method, utilises a census of products bachelor from transactions datasets, and weights products at the elementary level past expenditure share. For further data on the employ of transactions information in the CPI, refer to Consumer Price Alphabetize: Concepts, Sources and Methods

(true cat. no. 6461.0), Chapter 15 "Use of transactions data in the Australian CPI".

Prices are collected in the same kinds of retail outlets, and other places, where consumers purchase their goods and services. For each item selected for pricing, the chief types of outlets from which households purchase the items need to be identified so that a representative sample of these outlets can be selected. Examples of these outlets include supermarkets, department stores, hotels, motor vehicle dealerships, schools, child care centres and on-line websites.

The prices used in the CPI are those that whatever member of the public would have to pay to buy the specified skilful or service. Whatsoever taxes levied on goods or services (such every bit the GST) are included in the CPI toll. Similarly, prices are adjusted by any subsidy or assistance provided directly past government (e.g. Child Care Do good, Medicare). Sale prices, disbelieve prices and 'specials' are reflected in the CPI and so long as the items concerned are of normal quality (i.east. not damaged or shopsoiled), and are offered for auction in reasonable quantities. Any concessions bachelor to item groups of the population (such as age pensioners) are also taken into business relationship where significant. Where an item is priced over the net, any delivery or processing charges payable are included in the price.

The frequency of cost collection past item varies as necessary to obtain reliable price measures. Prices of some items are volatile (i.e. their prices may vary many times each quarter) and for these prices frequent price observations are necessary to guess a reliable average quarterly price. Each month prices are collected at regular intervals for goods such equally article of clothing and footwear, alcohol, and

domestic and overseas airline tickets. In the case of transactions data, acquirement and quantity data are collected on a weekly basis.

For most other items price volatility is non a problem and prices are collected one time a quarter. There are a few items where prices are changed at exceptional intervals, for example pedagogy services where prices are set once a year. In these cases the frequency of toll collection is modified accordingly.

For more information, refer to Consumer Toll Index: Concepts, Sources and Methods (cat. no. 6461.0), Chapter 7 "Sampling", Chapter viii "Price collection", and Chapter x "Consumer Price Index calculation in exercise".

Q. How are transactions information used in the CPI?

A. The price for an individual production is calculated from the transactions information by dividing a product'south revenue by the quantity sold. This price is referred to as a product unit value and represents the average price paid by consumers over a detail menstruation (eastward.1000. ane week or i month). A production'due south unit value is more representative of prices paid by consumers over the reference catamenia than signal-in-fourth dimension pricing. From March quarter 2014, the ABS significantly increased its use of transactions information to compile the Australian CPI, at present accounting for approximately 25 per cent of the weight of the Australian CPI. The approach adopted was a 'direct replacement' of observed point-in-time prices with a unit value calculated from the transactions data. The ABS practical this approach until the September quarter 2017.

From the introduction of the 17th serial CPI in December quarter 2017, the CPI is reviewed and re-weighted annually in Dec quarters. The primary data source for updating the weights in inter-HES years is Household Final Consumption Expenditure (HFCE) data from the National Accounts. For further information regarding the first almanac re-weighting of the CPI, refer to: Information Paper: Introduction of the Consumer Toll Index Weight Update, 2018 (cat. no. 6470.0.55.002). The HES will continue to exist used as the primary information source for re-weighting the CPI in the years where it is available. Farther information on annual re-weighting can be constitute in the following information papers:

Data Paper: Making Greater Utilise of Transactions Data to Compile the Consumer Price Alphabetize, Commonwealth of australia, 2016 (cat. no. 6401.0.sixty.003); and
Data Newspaper: An Implementation Plan to Maximise the Use of Transactions Data in the CPI, 2017 (cat. no. 6401.0.60.004).

Q. How is the CPI calculated?

A. The ABS invests considerable endeavor to ensure the quality of the CPI. Each quarter, almost 900,000 separate price quotations are used in the adding of the CPI, with data being nerveless by trained and experienced ABS staff and other sources such as transactions and administrative data for a representative range of appurtenances and services that Australian households acquire. The changes in price of these goods and services are combined with actual expenditure data of Australian households to calculate the overall price modify in the quarter.

For more information, refer to A Guide to the Consumer Cost Index: 17th Series, 2017 (cat. no. 6440.0)

Affiliate iv, 'Calculating the CPI'.

Q. How is the CPI reviewed?

A. Similar any other long-standing and important statistical series, the CPI is reviewed and updated periodically to ensure that information technology continues to run across community needs. The timing of these reviews has generally been linked to the results from the Household Expenditure Survey, Australia, Summary of Results (cat. no. 6530.0), which collects information about the expenditures of approximately 8,000 metropolitan households. An important objective of these reviews is to update the weights in the CPI to reflect the appurtenances and services purchased by Australian households. They also provide an opportunity to reassess the scope and coverage of the index and other methodological issues.

The last review of the CPI was the 17th series, undertaken in 2017 and implemented in respect of the December quarter 2017 issue. The 17th series review was a small-scale review of the CPI, consisting of an update of the upper level (expenditure class) weights in line with the 2015-sixteen HES, and a simple examination of structures and methodologies. For further data regarding the changes in the 17th series, refer to:

Information Paper: Introduction of the 17th Serial Australian Consumer Price Index, 2017 (true cat. no. 6470.0.55.001).

From the introduction of the 17th series CPI in Dec quarter 2017, the CPI is reviewed and re-weighted annually in December quarters. The chief data source for updating the weights in inter-HES years is Household Concluding Consumption Expenditure (HFCE) data from the National Accounts. The HES will keep to be used as the principal data source for re-weighting the CPI in the years where it is bachelor. Further information on almanac re-weighting tin exist found in the following data papers:

Data Paper: Increasing the Frequency of CPI Expenditure Form Weight Updates, July 2016 (cat. no. 6401.0.threescore.002); and
Data Paper: An Implementation Plan to Annually Re-weight the Australian CPI, 2017 (true cat. no. 6401.0.60.005).

Q. Why are there quality adjustments in the CPI?

A. The CPI aims to measure price changes for a stock-still handbasket of goods and services over time. In the real world, nonetheless, things don't remain constant - manufacturers and service providers are continually changing their products and services which may upshot in an comeback or deposition in quality. One challenge in compiling the CPI is to have it just measure whatever production toll change excluding the effects of any quality change. Quality adjustments are the principal procedure for ensuring continuity of consistent quality in the basket of goods and services over fourth dimension.

Examples of changes in quality might include:

changes in package size or content of food, such as breakfast cereals;
a change in the alcoholic content or size of bottles of spirits;
changes to textile or detailing of vesture;
changes in motoring functioning, economy, comfort, condom or durability of motor vehicles; and
changes in the frequency of public transport.

For more information on quality adjustments, refer to Consumer Price Index: Concepts, Sources and Methods (cat. no. 6461.0), Chapters 8 "Price Collection" and 9 "Quality change and new products".

Q. How are taxes treated in the CPI?

A. The CPI measures changes in concluding transaction prices actually paid by Australian households. The prices collected in the CPI include taxes where they are tied to the level of consumption of a specific practiced or service. Examples of taxes which are included in the CPI include:

Goods and Services Tax (GST);
Excise duty charged on alcohol and tobacco products;
Taxes on transfers of appurtenances or services such as postage stamp duty on the transfer of property are included in 'Other financial services'; and
Tariffs on motor vehicles (such as sales and excise taxes).

Local authorities rates and charges are also included in the Australian CPI as they are examples of inescapable costs associated with habitation buying.

For more than information, refer to Consumer Price Alphabetize: Concepts, Sources and Methods (cat. no. 6461.0), Chapter 5 "Coverage and classifications".

Q. How are subsidies treated in the CPI?

A. Equally with taxes, prices collected in the CPI are adapted for any subsidy or assistance provided directly by regime that are tied to the level of consumption of a specific practiced or service. Examples of such subsidies include:

Kid Care Benefit. For more data, refer to Childcare services in the CPI (Appendix) inside the Explanatory Notes department of Consumer Cost Index, Australia, September 2012 (true cat. no. 6401.0);
Medicare; and
Pharmaceutical Benefits Scheme (PBS).

For more information, refer to Consumer Price Alphabetize: Concepts, Sources and Methods (true cat. no. 6461.0), Chapter 5 "Coverage and classifications".

INTERPRETING CPI RESULTS

Q. How do I read or interpret a price index?

A. A cost alphabetize is a tool that allows users to summate movements over time. The indexes evidence how prices have inverse relative to a value of 100.0 in the index reference period. Nearly of the Consumer Price Indexes accept an alphabetize reference menstruation of the financial year 2011/12 = 100.0. An alphabetize of 110, for example, means at that place has been a 10 per cent increase in cost since the index reference flow; similarly an index of 90 ways a 10 per cent decrease since that index reference period. Movements of the index from one date to another can exist expressed as either points or percentage changes.

For more information on interpreting index numbers, refer to A Guide to the Consumer Toll Alphabetize: 17th Series, 2017 (cat. no. 6440.0), Section 3 "Using the CPI".

Q. How tin I use a price index to calculate the change in prices between any two points in time?

A. Movements in prices can be calculated between whatsoever two fourth dimension periods, and expressed as changes in alphabetize points or equally per centum changes. The alter in alphabetize points tin can be calculated by subtracting the two price indexes from the dissimilar time periods. The percentage change tin can be calculated by dividing the modify in index points by the earlier time period price index multiplied by 100.

The following case illustrates the method of calculating changes in index points and percent changes between the June quarter 2016 and June quarter 2017, but tin can be applied to any two points in time from the same price index series:

All Groups CPI, Weighted average of 8 capital cities (2011/12 = 100.0)

June quarter 2016/2017 All Groups CPI

	Index number
June quarter 2017	110.7
less June quarter 2016	108.vi
Change in alphabetize points	ii.one

Pct change	two.i/108.vi x 100 = ane.nine% (rounded to one decimal place)

Note that the Change in index points and the Percentage alter are unlike measures of modify and are usually different. For more than information on interpreting alphabetize numbers, refer to A Guide to the Consumer Cost Index: 17th Series, 2017 (cat. no. 6440.0), Section 3 "Using the CPI".

Q. How do I summate changes in the CPI between calendar or financial years?

A. Users may want to compare changes in the prices betwixt ii periods longer than a quarter, such as between two years. Index numbers for calendar or financial years are calculated as simple (arithmetic) averages of the iv quarterly index numbers for the relevant period. Calendar years are calculated as the unproblematic (arithmetic) average of the March, June, September and December quarters for the relevant year. Fiscal years are calculated as the simple (arithmetic) average of quarters from the September quarter to the June quarter of the financial year. The following example illustrates the method of calculating the modify in the financial year index for the All Groups CPI betwixt the fiscal years 2015/16 and 2016/17:

All Groups CPI, weighted boilerplate of eight capital cities (2011/12) = 100.0

All Groups CPI, Fiscal year 2015/16

	Index number
September quarter 2015	108.0
plus December quarter 2015	108.iv
plus March quarter 2016	108.two
plus June quarter 2016	108.half dozen
Financial Year 2015/16	433.2/4 = 108.3 (rounded to 1 decimal place)

All Groups CPI, Financial year 2016/17

	Index number
September quarter 2016	109.iv
plus December quarter 2016	110.0
plus March quarter 2017	110.five
plus June quarter 2017	110.seven
Fiscal Year 2016/17	440.6/four = 110.2 (rounded to one decimal place)

The modify in index points tin exist calculated by subtracting the two toll indexes from the dissimilar fourth dimension periods. The pct change can exist calculated past dividing the change in index points by the earlier time period price alphabetize multiplied by 100.

	Index number
Financial Year 2016/17	110.2
less Financial Twelvemonth 2015/xvi	108.3
Change in index points	1.ix
Per centum change	1.9/108.3 x 100 = ane.8% (rounded to ane decimal place)

Annotation that the Change in alphabetize points and the Percentage change are different measures of change and usually differ. For more data on interpreting index numbers, refer to A Guide to the Consumer Cost Index: 17th Series, 2017 (true cat. no. 6440.0), Section 3 "Using the CPI".

Q. What alphabetize should I employ for contract escalation?

A. In that location are a range of contracts which use price indexes to adapt payments and/or charges to take account of changes in cost inflation. Although the ABS acknowledges that the various price indexes it publishes are used in indexation clauses, it neither endorses nor discourages such utilise.

The ABS is the central statistical authority for the Australian authorities. Its part includes a requirement to publish price index data, and to broadly explain the underlying methodology and full general limitations of such data. The ABS may provide information about what cost indexes are published past it, but will not recommend or comment on the use (or otherwise) of the toll indexes. In addition, the ABS does not advise, annotate or help in preparing or writing contracts, nor does it provide advice on disputes arising from contract estimation.

The ABS has prepared information for users that sets out a range of issues that should be taken into business relationship by parties considering an indexation clause in a contract using an ABS published price index. This paper Utilise of Price Indexes in Contracts is bachelor on the ABS website. The latest CPI data is available in Consumer Price Index, Commonwealth of australia (cat. no. 6401.0).

Q. Can I compare price levels using price indexes?

A. No. Cost indexes, such as the CPI are series synthetic specifically to measure changes in prices over time. It is important to note that these indexes are not appropriate for measuring cost differences between ii separate cities. For example, the capital city consumer cost indexes measure price movements over time in each city individually relative to a common reference catamenia. They do not measure differences in retail price levels between cities.

In the June quarter 2017, the All Groups CPI was 111.7 for Sydney and 111.0 for Melbourne. This means that since the reference flow 2011/12, prices in Sydney accept increased more than than Melbourne. This does not mean price levels are necessarily higher or lower in Sydney than Melbourne.

Q. Why doesn't the ABS adjust the CPI when there are one-off price spikes (like bananas, or introduction of the GST)?

A. On a quarter to quarter basis, the prices of items can be impacted by a number of factors including exchange rates, supply constraints, specials (being introduced or withdrawn), natural disasters and seasonal patterns. These factors cannot always be readily quantified but they can take a existent impact on the price of the items selected in the basket, so their impact tin also be seen in the CPI.

Q. How was kid care calculated in September quarter 2020 and June quarter 2020?

A. In response to COVID-19, the Australian Authorities introduced a policy which resulted in Australian households receiving complimentary child care. The impact of this policy has created significant volatility in the Australian CPI. Beneath is an explanation of how kid care is calculated for these two quarters.

Child care has a weight of i.17% in the CPI.

In the June quarter 2020 the child care expenditure class decreased 95%. This was due to the introduction of free kid intendance by the Australian Government. The quarterly percentage modify can be calculated by dividing the alter in index points by the previous menses toll index multiplied by 100.

The post-obit outlines the method of calculating the autumn of 95% in child care in the June quarter 2020.

Kid care, Weighted boilerplate of 8 capital cities (2011/12 = 100.0)

March 2020 to June 2020 quarter Child care series

	Index number
June quarter 2020	7.6
less March quarter 2020	152.8
Change in index points	-145.ii
Percentage change	-145.2/152.viii x 100 = -95.0% (rounded to one decimal place)

In the September quarter 2020 kid care fees for Australian households returned to their pre-COVID-19 charge per unit having been costless during the June quarter. This resulted in a 1381.half-dozen% increase. Using the same method as above, the following outlines the adding of the September quarter 2020 kid care percent movement.

June 2020 to September 2020 quarter Child intendance series

	Index number
September quarter 2020	112.half dozen
less June quarter 2020	seven.6
Alter in index points	105.0
Percentage alter	105.0/7.6 x 100 = 1381.6% (rounded to 1 decimal place)

The fall and rise of the kid care series in the CPI is illustrated in the post-obit chart. The cumulative change over the June and September 2020 quarters is a fall of 26.3%.

Child intendance index in the CPI (2011-12 = 100.0)
Figure 1 - Child care index in the CPI (2011-12 = 100.0)

Analytical MEASURES OF INFLATION

Q. Is the CPI seasonally adjusted?

A. No, the headline CPI is not seasonally adjusted considering it is never revised (apart from exceptional circumstances). However, the ABS produces an analytical series, 'All groups CPI, seasonally adjusted' which is calculated by applying seasonal adjustment to the expenditure course components of the CPI which are establish to be seasonal, and so aggregates the seasonally adjusted and non-seasonally adapted components, using the weighting pattern at the weighted average of eight uppercase cities level. Equally the seasonal adjustment process is based on concurrent seasonal adjustment, the All groups CPI, seasonally adapted estimates will be subject to revision. More information about seasonal aligning can be found in Information Paper: Seasonal Aligning of Consumer Price Indexes, 2011 (cat. no. 6401.0.55.003).

Q. What is the difference between the "headline inflation" and the "underlying aggrandizement" reported in the media?

A. The ABS publishes "headline inflation", the All Groups CPI, weighted average of viii capital letter cities as well as a range of sub components and belittling measures. Two of these analytical trend measures, the Trimmed mean and Weighted median, are normally termed "underlying inflation".

The All Groups CPI measures the change in price of the entire CPI basket including any cost shocks up or down (due east.thousand. price spikes caused by supply constraints or a change in regime subsidies or taxes). The Trimmed hateful and Weighted median series are part of the suite of analytical measures of the CPI. They aim to remove volatility observed in the quarterly price modify of the original CPI acquired by seasonal and irregular price movements to estimate the underlying aggrandizement trend.

For more data on underlying inflation, refer to Data Paper: Seasonal Aligning of Consumer Price Indexes, 2011 (true cat. no. 6401.0.55.003).

FURTHER INFORMATION

Q. The ABS previously published average retail prices for selected items for each capital city. Why are they no longer bachelor?

A. The ABS undertook a major review of the CPI in 2010 and announced changes to ensure the CPI continues to meet the requirements of the Australian community. This review determined that the Average Retail Prices (ARP) data neither performs the office of showing price change over time (temporal mensurate) nor a detailed cost level comparison between majuscule cities (spatial measure) in an unbiased, robust fashion.

For more data on ceasing the publication of boilerplate retail prices, refer to the Introduction within the Analytical Series section of Outcomes of the 16th Serial Australian Consumer Price Index Review, Dec 2010

(cat. no. 6469.0).

Q. What information is published with the CPI?

A. Consumer Price Index, Australia (true cat. no. 6401.0) includes a range of commentary and analysis for users in 'Chief contributors to change' and 'Capital cities comparison' each quarter. In addition, the CPI includes a printable pdf publication and a number of Excel workbooks available in the 'Downloads' tab that contain cost indexes, percentage changes, and contributions to modify that covers:

the peak level 'All Groups',
11 groups (e.grand. Food and non-alcoholic beverages, Vesture and footwear, Booze and tobacco, Health, Insurance and financial services),
33 sub-groups (e.g. Fruit and vegetables, Footwear, Alcoholic beverages, Medical, dental and hospital services, Furniture and furnishings), and
87 expenditure classes (e.g. Fruit, Rents, Beer, Dental services, Child care).

These items are available for the 8 State and Territory capital cities, and for the weighted average of the eight capital cities. A complete list of the CPI groups, sub-groups and expenditure classes is contained in tables vi and vii in Consumer Price Alphabetize, Australia (cat. no. 6401.0).

Various series are presented in this publication which are helpful for analytical purposes, including:

All groups CPI, seasonally adjusted;
All groups CPI, excluding food and energy;
All groups CPI, excluding housing; and
All groups CPI, including deposit and loan facilities (indirect charges).

For farther information, explore the diverse downloadable files (Adobe Acrobat pdf file and Microsoft Excel time series spreadsheets) from the 'Downloads' tab for Consumer Cost Alphabetize, Australia (cat. no. 6401.0), or refer to the publications available in the 'Related Data' tab.

Q. What if I want more detailed information?

A. The most detailed CPI data the ABS publishes is at the 'Expenditure class' level, for each State and Territory capital letter city. The ABS includes information almost expenditure weights but does not publish data below this level. While the quantity weights are held constant at the expenditure class level, the weights of products within an expenditure class (e.grand. different types of breadstuff) tin can be varied between periodic reviews to reflect changed purchasing patterns. Whatsoever weight changes are introduced into the CPI in such a manner as to not affect the level of the index.

For each Expenditure class, a brief indication of typical items that are priced is bachelor in A Guide to the Consumer Price Index: 17th Series, 2017 (cat. no. 6440.0), Appendix 2 " Examples of goods and services priced in the 17th Series CPI". Additional data well-nigh the types of outlets or sources of pricing information, likewise as challenges with price collection is available in Consumer Price Alphabetize: Concepts, Sources and Methods (cat. no. 6461.0), Chapter 8 "Price collection".

Q. What are some limitations of the CPI?

A. The CPI is subject area to both limitations in application and limitations in measurement.

i) Application

The CPI is designed to measure out inflation for Australian metropolitan households and thus may not accurately reverberate the experience of people living in rural areas. Also, the CPI cannot be used to measure differences in toll levels or living costs between ane place and another; it only measures changes in prices over fourth dimension. A college index for one area does not necessarily mean that prices are higher at that place than in some other area with a lower alphabetize. It ways that prices take risen faster in the area with the higher index since the 2 areas' common reference menstruum.

The CPI uses a fixed handbasket which does non take into account people'southward substitution to relatively cheaper goods and services which is role of a toll-of-living index. The upper level (expenditure class) weights are updated annually with the introduction of the 17th series CPI in the December quarter 2017. Additionally, the ABS has implemented multilateral methods for 28 ECs, which weight products at the elementary level using expenditure shares. These enhancements mitigate the impact of the substitution effect.

2) Measurement

Sampling mistake. Because the CPI measures cost changes based on a sample of items, the published indexes may differ from what the results would exist if every transaction by households were used to compile the index. Sampling errors are limitations on the accuracy of the index, not mistakes in calculating the index.

Non-sampling errors. Non-sampling errors are caused by problems of price data collection, logistical lags in conducting surveys, difficulties in defining basic concepts and their operational implementation, and difficulties in treatment the issues of quality change. Not-sampling errors can be far more chancy to the accurateness of a cost index than sampling errors, then the ABS expends much try to minimise these errors. ABS staff are trained to ensure the comparability of the quality of items from period to menses, collection procedures are extensively documented, and in that location is a rolling program to confirm the continued representativeness of the items being sampled. In improver, the ABS has an ongoing inquiry program to monitor and identify new/better sources of information (expenditure weights and cost observations) and methodologies.

For more data, refer to Consumer Toll Alphabetize: Concepts, Sources and Methods

(cat. no. 6461.0), Chapter 11 "Maintaining the relevance of the consumer price alphabetize".

Q. Volition the CPI exist updated in the future?

A. Yep. The CPI is regularly updated to reflect changes in consumer ownership habits, or shifts in population distribution and demographics. The ABS conducts a major review of the CPI approximately every six years to take advantage of information from the updated Household Expenditure Survey (HES). The most recent update occurred in the December quarter 2017 using 2015/16 HES information. The HES allows the ABS to monitor and implement changes in the expenditure patterns of consumers. From 2018 the CPI weights will exist updated annually using Household Final Consumption Expenditure information. The ABS is continually updating the toll samples and expenditure patterns below the published level to ensure it represents current expenditure past households, and researching improved statistical methods.

From the introduction of the 17th serial CPI in the December quarter 2017, the CPI is re-weighted annually in Dec quarters. In the years where HES data is not available, Household Concluding Consumption Expenditure (HFCE) estimates from the National Accounts are used as the primary data source to update the upper level expenditure patterns.

For farther data about the most recent

updates to the CPI, refer to Information Newspaper: Introduction of the 17th Series Australian Consumer Price Index, 2017 (cat. no. 6470.0.55.001) and Data Paper: Introduction of the Consumer Toll Alphabetize Weight Update, 2018 (cat. no. 6470.0.55.002).

Q. How can I go information on the CPI?

A. Gratis admission to all published CPI data is bachelor on the ABS website (

world wide web.abs.gov.au). If you lot require more detailed data, or would like to speak to someone about the CPI, call the National Data and Referral Service on 1300 135 070, or email client.services@abs.gov.au

This telephone service also provides an option to listen to a recording of the latest CPI headline data.

Nosotros likewise recommend the following products for farther information:

Consumer Price Index, Australia (cat. no. 6401.0);
A Guide to the Consumer Cost Index: 17th Serial, 2017 (cat. no. 6440.0);
Information Newspaper: Introduction of the 17th Series Australian Consumer Price Index, 2017 (true cat. no. 6470.0.55.001); and
Consumer Price Index: Concepts, Sources and Methods (cat. no. 6461.0).

INTRODUCTION OF CARBON PRICING

Q. Does the ABS produce a carbon exclusive Consumer Price Index (CPI) and/or Living Cost Indexes?

A. The Consumer Price Index (CPI) measures price alter for consumption appurtenances and services acquired past Australian resident households. The Australian Government repealed carbon pricing with effect from ane July 2014. It is not possible to quantify the bear on of removing the carbon toll on the price alter measured by the CPI.

Q. How was the carbon price reflected in the CPI and/or Living Toll Indexes?

A. The CPI and Living Cost Indexes measure out changes in the prices paid by Australian households, including any taxes payable on appurtenances and services. Therefore, whatsoever changes in the prices paid by Australian households as a result of the introduction of the carbon price have been reflected in the CPI and Living Cost Indexes.

WHAT Role DOES HOUSING PLAY IN THE CPI

Q. Does the ABS include housing in the CPI and/or Living Price Indexes?

A. Housing plays an of import office in the calculation of the CPI with almost 23 per cent of all spending by Australian households being directed towards housing. This data is sourced from the Household Expenditure Survey and other ABS sources, including the National Accounts. Nearly 8 per cent of all household spending is directed towards the purchase of a new dwelling, while rents concenter around 7 per cent of full spending past households. Maintenance and belongings charges and utilities (including electricity, gas and h2o) account for nigh 8 per cent of household spending.

Of note, state is excluded from the calculation of the Commonwealth of australia CPI. This approach aligns with the main purpose of the CPI as a macroeconomic indicator (equally the purchase of country is considered an investment rather than consumption); and international statistical standards. Land and the dwelling for both new and established houses are included in the adding of the ABS Selected Living Price Indexes (SLCIs).

The ABS produces a range of other indexes that are meliorate suited to assessing changes in the cost-of-living of Australian households.

The SLCIs are particularly suited to assessing whether or non the disposable incomes of households have kept pace with price changes. This is because the underlying concepts and products priced are designed to answer the question 'Past how much would after tax money incomes need to change to allow households to buy the same quantity of consumer goods and services that they purchased in an before period?'

Housing plays an important role in the compilation of the ABS living-cost indexes. In particular, the SLCIs measure out the full price of the dwelling including land; as well as changes to mortgage interest charges, to determine if housing living costs have changed. The SLCIs are the nearly appropriate measures to determine if the cost-of-living of Australian households have changed over time.

For more than information encounter the feature article What role does housing play in the Consumer Toll Index and Selected Living Toll Indexes?