Quarterly Trimmed mean (pre-October 2025 compilation basis) explanatory note

Australia’s primary measure of headline inflation transitioned to a complete monthly measure of the Consumer Price Index (CPI) on 26 November 2025 for the October 2025 reference period onward. 

As explained in previously released papers[1], the ABS will continue to publish a quarterly Trimmed mean (along with associated Weighted median and seasonally adjusted quarterly indexes[2]) through to at least the June quarter 2027. These series will be compiled in a manner consistent with their history of price collection frequency, so that their pre-October 2025 seasonal patterns and properties will be maintained. The continuation of these series will provide a consistent measure of underlying inflation while the seasonal patterns and underlying properties of the new monthly series become clearer, which usually requires around 3 years' worth of data. 

This paper summarises the methods that will be used to compile the quarterly Trimmed mean using pre-October 2025 price collection patterns and provides references to further detailed papers. It also highlights the treatment that will apply to indexes where the source data has changed with the transition to the complete Monthly CPI. 

Producing a quarterly Trimmed mean that continues the series that has been published by the ABS since 2007 (and produced in its current form since 2011) involves using the pre-October 2025 price collection frequency for each of the CPI Expenditure Classes (ECs). This approach allows existing seasonal patterns and seasonal adjustment quality that has built up over the long time series to be maintained. The pre-October 2025 price collection frequency will also be used to underpin the related quarterly seasonally adjusted series and the Weighted median.

As part of the transition to the complete Monthly CPI, new data sources were incorporated into the CPI for Child care, Long day care fees (part of the Preschool and primary education EC), and Insurance. Data from the sources used prior to the transition to the complete Monthly CPI are no longer collected by the ABS. As a result, from the December quarter 2025 reference period, the quarterly Trimmed mean will include the new data sources for these ECs. The inclusion of these new data sources in the Trimmed mean has been managed using standard seasonal adjustment practices and does not impact the continuity of the quarterly Trimmed mean series.

Further information about the changes to each of these series is available in the paper Introducing the Consumer Price Indexes' new monthly time series.

The two most common pre-October 2025 collection frequencies for CPI Expenditure Classes (ECs) (see Figure 1) are:

• Monthly for ECs such as Fruit and Rents. In these cases, the average of the relevant three monthly indexes will be used to produce the quarterly index.
• Once per quarter. In these cases, only every third month of the price data will be used for the purposes of producing the quarterly Trimmed mean. Quarterly prices in a particular EC might be measured in month 1 of each quarter (January, April, July, and October), OR month 2 (February, May, August, and November), OR month 3 (March, June, September, and December). For example, Restaurant meal prices were previously collected in month 2 each quarter. In this case the monthly indexes for February, May, August and November will be used in the quarterly Trimmed mean.

Some ECs, such as Wine, and Garments for women, have a mixed collection frequency (e.g. monthly and quarterly). The mixed frequency is for components below the EC level and will also continue to be used for the quarterly Trimmed mean. Appendix 1 provides details of the months used for each EC.

Quarterly seasonal adjustment is performed via standard methods using the well-established seasonal patterns in the series’ history for each EC compiled on the pre-October 2025 basis. 

For the ECs using new data sources (Child care and Insurance), standard methods have been applied to assess and manage the effects of these changes. In the case of the Child care EC, a five-year historic series compiled using the new data source has been used to estimate the new seasonal pattern in the new data source. The introduction of a new source data for the Insurance EC has been assessed as not requiring any treatment in seasonal adjustment as it is expected to be non-seasonal.  

The ABS will continue to monitor and manage all quarterly series using standard seasonal adjustment techniques, as per established practice for all series. The resulting seasonally adjusted series for all 87 ECs will be published alongside the quarterly Trimmed mean.

After the ECs have been seasonally adjusted, the final steps required to produce the quarterly Trimmed mean are:

• The seasonally adjusted movements for each of the 87 CPI Expenditure Classes (ECs) are ranked from lowest to highest. Each EC has a weight that represents the proportion of expenditure spent on it out of total household expenditure.
• Those weights are then used to work out which ECs (including parts of the ECs that are on the 15 per cent and 85 per cent borders) make up the top and bottom 15 per cent of the distribution. These are the ECs that are 'trimmed out'.
• The Trimmed mean is calculated as the weighted average of the movements for the remaining 70 per cent of ECs by weight.

Further details on how the quarterly Trimmed mean is produced is available in Underlying Inflation Measures: Explaining the Trimmed Mean and Weighted Median.

The quarterly Trimmed mean (pre-October 2025 compilation basis) and new Monthly Trimmed mean measures are both produced using the approach described above. There are, however, a number of important differences, which mean that the two measures are not expected to exactly align. Differences between the two are listed in the following table:

The differences in the way these two indexes are constructed underpins the different strengths of each index. The new Monthly Trimmed mean makes use of all the monthly price data and will provide monthly insights on underlying inflation. The quarterly Trimmed mean (pre-October 2025 compilation basis) has a longer time series and more established seasonal factors, meaning its properties are better understood.  The full properties of the complete Monthly Trimmed mean will become more established as the available time series lengthens, enabling standard seasonal adjustment approaches to be applied to the full monthly CPI basket. The ABS will continue to publish a quarterly Trimmed mean (along with associated Weighted median and seasonally adjusted quarterly indexes) through to at least the June quarter 2027. 

A comparison of the quarterly Trimmed mean described in this paper and the new Monthly Trimmed mean is available in the previously published information paper: Introducing the new monthly CPI time series - extended analysis and Trimmed mean.

[1] Previous papers include: Introducing the CPI new monthly time series - extended analysis and Trimmed mean and Seasonal adjustment for the new complete Monthly CPI.

[2] The ABS will also continue to publish quarterly original series on an ongoing basis. From December quarter 2025 these series will be calculated as the average of the monthly indexes and are primarily designed to support those who use the CPI for indexation, contract or other purposes.