Initial Release of Seasonally Adjusted Consumer Price Index
The Consumer Price Index (CPI) is an ABS "category one" major economic indicator, measuring quarterly changes in the price of a "basket" of goods and services. These account for a high proportion of the expenditure by metropolitan households. Despite its profile, the CPI was never released by the ABS in seasonally adjusted terms: instead, the Reserve Bank of Australia (RBA) produced an independent seasonal analysis on its measure of "underlying" inflation. In 2007 the RBA agreed that the ABS should review this situation and officially take over the seasonal adjustment of this measure. Compiling seasonally adjusted statistics which would immediately stand up to the expected scrutiny of financial markets and meet the standards expected from ABS data was expected to be challenging.
Following the 2007 decision, the ABS performed a detailed review of CPI expenditure classes to ensure a high quality seasonal adjustment. The release of the 16th series re-weighting of the "basket" of goods on 26th October 2011 offered the most appropriate time to introduce the ABS seasonally adjusted estimates to the CPI headline figure (All Groups average of eight capital cities), as well as the CPI underlying measures.
Seasonality in a time series can be identified by using SEASABS, the standard ABS seasonal adjustment software based on the widely used X11 program, introduced by the US Bureau of the Census in 1967. Identification of the seasonality in the time series is based on a number of standard diagnostic tools as well as critical analysis by experienced analysts. Of the 87 expenditure classes, 68 were identified as having a seasonal component, with six of these only being found to display seasonal behaviour historically though not in recent years.
For further information on the release of the 16th series, please contact Lewis Conn, Director, CPI (02 6252 7326; firstname.lastname@example.org). For information on the CPI seasonal adjustment, please contact Rachel Barker (02 6252 6183; email@example.com) or Tom Outteridge (02 6252 6406; firstname.lastname@example.org).