Introducing the Consumer Price Index’s new monthly time series - extended analysis and Trimmed mean

The information paper Introducing the Consumer Price Index's new monthly time series published by the Australian Bureau of Statistics (ABS) on 18 November 2025 included an overview of the monthly data from April 2024 – June 2025 and provided insights into new trends that can be observed in the data collected for the indexes that are changing from quarterly to monthly. This paper extends this analysis to October 2025 and covers the new monthly Trimmed mean series and how it compares with the quarterly Trimmed mean series. 

As explained in the previous paper the complete Monthly CPI provides a more frequent and timelier read of inflation. The monthly series is more variable than the quarterly series because it is more responsive to the dynamic nature of price changes (e.g. sales events). 

The transition to the complete Monthly CPI is underpinned by a substantial increase in the amount of data collected monthly.  The quarterly CPI and monthly Indicator included a mix of monthly, quarterly, and annual price collection with around: 

• 50% of the weight of the CPI basket being priced monthly;
• 41% priced quarterly; and
• 9% priced annually. 

In the complete Monthly CPI: 

• 87% of the CPI by weight is collected monthly;
• 4% is priced quarterly including Other financial services (items such as stamp duty, real estate services and accounting services), as these prices do not tend to change frequently; and
• 9% will continue to be priced annually as items such as school fees and private health insurance tend to only change price once a year. 

The previous paper compared the published quarterly CPI with a quarterly CPI data series calculated as the average of the three relevant Monthly CPIs. This analysis showed close alignment between the two series for the period between April 2024 and June 2025. Extending this analysis to include the September quarter 2025, the following graphs show that the close relationship between the two series continues (all series rounded to one decimal place).

With the introduction of the complete Monthly CPI, the ABS will also be publishing a Monthly Trimmed mean series back to April 2024. The Monthly Trimmed mean measures underlying inflation and is less variable than the Monthly CPI. The ABS has published the quarterly Trimmed mean since 2007 and has produced it in its current form since 2011.

There are three steps involved in calculating the Trimmed mean. Firstly, the seasonally adjusted movements for each of the 87 CPI Expenditure Classes (ECs) are calculated and ranked from lowest to highest. Each EC has a weight that represents the proportion of expenditure spent on it out of total household expenditure. The second step uses these weights to work out which ECs make up the top and bottom 15 per cent of the distribution (including parts of the ECs that are on the 15 per cent and 85 per cent borders). These are the ECs that are 'trimmed out'. Finally, the Trimmed mean is calculated as the weighted average of the movements for the remaining 70 per cent of ECs by weight.

The existing quarterly Trimmed mean and new Monthly Trimmed mean measures are both produced using this approach. There are, however, important differences between the two which imply that the two measures are not expected to exactly align. The new Monthly Trimmed mean measure:

• Makes use of all the monthly price data, whereas the quarterly Trimmed mean uses less price data for around half of the CPI basket¹.
• Uses monthly seasonal adjustment, whereas the quarterly Trimmed mean uses quarterly seasonal adjustment.
• Trims the distribution of monthly seasonally adjusted movements², while the quarterly Trimmed mean trims the distribution of quarterly seasonally adjusted movements.
• Includes new data sources for childcare and insurance as outlined in Introducing the Consumer Price Indexes' new monthly time series . From December quarter 2025 these will also be incorporated into the data underpinning the quarterly Trimmed mean.

The differences in the ways these two indexes are constructed underpins the different strengths of each index. The new Monthly Trimmed mean makes use of all the new monthly price data and will provide monthly insights on underlying inflation. The existing quarterly Trimmed mean has a longer time series and more established seasonal factors, meaning its properties are better understood.  While the two Trimmed mean indexes are not identical, our analysis shows that, to date, there is no obvious bias in either series, and they both provide valid and useful measures of underlying inflation.

The full properties of the complete Monthly Trimmed mean will become more established as the available time series lengthens. 

To enable the properties of the new Monthly Trimmed mean to be understood in relation to the previously published quarterly series, the ABS will continue to publish a quarterly Trimmed mean based on the pre-October 2025 compilation approach for at least 18 months³, by which time there will be sufficient monthly data (i.e. a time series of three years) for standard seasonal adjustment approaches to be applied to the full monthly CPI basket. 

This section presents a comparison of the new Monthly and existing quarterly Trimmed mean quarterly movements. The new Monthly Trimmed mean series is calculated from seasonally adjusted series using data up to October 2025. Quarterly movements for the new Monthly Trimmed mean series are derived by averaging the three-monthly indexes for each quarter. 

The following graph shows that while the two Trimmed mean indexes are not identical, to date, the two series are not diverging over time. 

The following graph shows that between September 2024 and September 2025 quarters there was at most a 0.13 percentage point difference between the previously published quarterly Trimmed mean movements and the quarterly Trimmed mean movements derived from the complete Monthly. Over these five quarters, there was a 0.22 percentage point cumulative difference between the two approaches. 

Annual movements for the complete Monthly Trimmed mean can be calculated as the percentage change either between one month and same month in the previous year, or between the two quarters a year apart. As shown in the following Table, the annual movement derived from the Monthly Trimmed means for June quarter 2025 was 0.3 percentage points higher, at 3.0%, than the quarterly Trimmed mean. The annual movement for the September 2025 quarter was within 0.1 percentage point, at 3.1% for the Monthly Trimmed mean, compared with 3.0% for the quarterly Trimmed mean. 

The CPI in original terms has never been revised. However, like all measures produced based on seasonal adjustment, Trimmed mean measures are routinely revised as seasonal factors are updated with each new measurement period. 

For the quarterly Trimmed mean these revisions are generally small although the annual movement for the June quarter 2025 Trimmed mean was revised by a 0.1 percentage point between when it was first published and when it was next published in the September quarter publication. As the monthly series lengthen, seasonal adjustment quality will improve, and this will be reflected in revisions to the Monthly Trimmed mean. Comparisons between the Monthly Trimmed mean index series and quarterly Trimmed mean index series will therefore evolve over time, reflecting revisions in both indexes. 

¹More information on the pre-October 2025 compilation method for quarterly series is available in Appendix C in Seasonal adjustment for the new complete Monthly Consumer Price Index (CPI) | Australian Bureau of Statistics

²For more information the methods being used to seasonally adjust the new monthly series see: Seasonal adjustment for the new complete Monthly Consumer Price Index (CPI) | Australian Bureau of Statistics

³More information on the pre-October 2025 compilation method for quarterly series is available in Appendix C in Seasonal adjustment for the new complete Monthly Consumer Price Index (CPI) | Australian Bureau of Statistics