Why is the ABS producing a monthly CPI now?
The introduction of the monthly CPI indicator is in response to demand from government, businesses, economists and the general community for a timelier indicator of household inflation. Until recently, the costs to produce a monthly CPI have been prohibitive.
The use of new data sources to produce the CPI have reduced data collection costs enabling the possibility of producing a more frequent measure of household inflation. In particular, the use of scanner data and web-scraping (automated) data collection techniques provides high frequency data at a lower cost.
Which measure of inflation should I use?
The quarterly CPI is regarded as Australia’s key measure of inflation because:
- It enables consistent comparisons to be made over time back to when the index started in 1948;
- Prices are updated at least once during the quarter for everything in the CPI basket where a price change could have occurred, noting that prices for some items such as education fees only change once per year;
- It is revised only in exceptional circumstances, such as to correct a significant error or, in the case of all price indexes, when the reference base is changed periodically; and
- It is more comprehensive than the monthly CPI indicator as it publishes data for all 87 expenditure classes and each of the eight capital cities.
What is the difference between the monthly CPI indicator and the quarterly CPI?
The key differences between the monthly and quarterly CPI are:
Monthly CPI indicator
Indicator of inflation
Principal measure of CPI inflation
Captures the average price change in one month
Captures the average price change over three months
Prices measured once a quarter are recorded in the month they are measured
Prices measured once a quarter apply for the whole quarter
May be subject to routine revisions
Only revised in exceptional circumstances
Not all prices collected each month
All prices collected each quarter
Subset of data published including national level data only
More detailed data published including for capital cities
Will the monthly CPI indicator movements and quarterly CPI movements be equivalent?
There are two reasons the movements of the monthly CPI indicator and quarterly CPI won’t be equivalent:
- The time periods being compared are slightly different between the two measures, e.g June 2021 to June 2022 compared to June quarter 2021 and June quarter 2022.
- The monthly CPI indicator captures the price change each month, whereas the quarterly CPI captures price change across the three months of the quarter.
When will the monthly CPI indicator be available?
On 26 October 2022, the ABS will commence publication of a monthly CPI indicator. This first publication will be released at the same time as the quarterly CPI publication for the September quarter 2022. Thereafter, the monthly CPI indicator will be published four weeks after the end of the reference month, starting with the October month release on 30 November. The exception to this will be November, which will be released in January owing to the Christmas / New Year holiday period.
Where can I find the monthly CPI indicator?
It will be published each month on the ABS website in a new publication called ‘Monthly CPI indicator, Australia’ and available on the page Price indexes and inflation.
Will the monthly CPI indicator be revised?
Although the quarterly CPI is not revised, the monthly CPI indicator may be revised, particularly while development work continues. Some examples of where revisions may occur include:
- More complete data becoming available closer to the release of the quarterly CPI. This will result in revisions to the previous 1-2 months of the monthly CPI indicator.
- Converting a series from being measured once per quarter to being measured on a monthly basis. Revisions to the previous 12 months will be implemented to preserve the annual movement in the current and subsequent months.
Where a revision to the monthly CPI indicator does occur, the ABS will communicate the reason for the revision.
Is the monthly CPI indicator suitable for indexation?
The quarterly CPI will continue to be Australia’s key measure of inflation. The monthly CPI has some deficiencies relative to the quarterly CPI as some the data collections underpinning it were not designed with monthly reporting of inflation in mind. It should be noted that the monthly CPI indicator may be routinely subject to revision, in contrast to the quarterly CPI which is only revised in exceptional circumstances.
Although the ABS acknowledges that the various price indexes it publishes are used by businesses and government to adjust payments and/or charges, it neither endorses nor discourages such use.
The ABS may provide information about what price indexes we publish, but will not recommend or comment on the use (or otherwise) of the price indexes.
What data sources are used to produce the quarterly CPI?
The ABS uses a combination of store collected prices, scanner data, web-scraped data and administrative data. The availability of scanner and web-scraped data means that millions of prices are used to produce the CPI.
What data is used to measure the monthly CPI indicator?
The monthly CPI indicator uses the same data as the quarterly CPI. The monthly CPI indicator combines data with varying collection frequencies. For those goods and services where prices change often, such as food and petrol, monthly price data is available. Where price change is less frequent, such as for restaurant meals and hairdressing services, price data is collected once per quarter. In some cases, prices are collected annually where prices are known to change only once per year, such as for education fees.
The monthly CPI indicator combines the data collected monthly, quarterly and annually to present a timelier measure of inflation.
Is the whole CPI basket represented in the monthly CPI indicator?
Yes. Just under half of the CPI basket has data collected each month. For the remaining half of the basket, price data is collected every third month and updated in the CPI basket in the month it is collected. Where no new price data is collected for an item in a particular month, the price is ‘carried forward’. This assumes no price change for that item (see question 14).
How much of the CPI basket has up-to-date price data each month?
The below table outlines the percentage of data that will be updated in the relevant months broken down by collection frequency (monthly, quarterly, or annual basis):
Timing of data collection by weight in CPI basket
Data updated month (%)
Data updated quarterly (%)
Data updated annually (%)
Prices not updated (carried forward*) (%)
Total weight (%)
January, April, July, and October
February, May, August, and November
March, June, September, and December
Including the data collected once per year:
- January, April, July and October months will include up-to-date price information for 62% of the weight of the quarterly CPI.
- February, May, August and November months will include up-to-date price information for 73% of the weight of the quarterly CPI.
- March, June, September and December months will include up-to-date price information for 71% of the weight of the quarterly CPI.
*Carry forward imputation is explained in question 14.
What is measured on a monthly basis?
Food and non-alcoholic beverages; alcohol and tobacco; automotive fuel; clothing for men and women; rents; project houses; townhouses; cleaning and maintenance products; personal care products; other non-durable products; domestic holiday travel; international holiday travel; bank fees (direct).
A full list of collection frequencies will be available in the monthly CPI indicator publication.
How does the monthly CPI indicator deal with those goods and services that the ABS does not price each month?
Prices that are not collected in a given month will be imputed for the relevant goods and services. The method used is called ‘carry forward’ imputation. This involves imputing a zero movement in the months for which price data is not available. In other words, it is assumed that there has been no price change in the months for which prices are not collected.
For example, Restaurant meal prices are collected in month 2 of each quarter. Therefore,
- In month 1, a carry forward of the previously collected price (in month 2 of the previous quarter) is used as the price for month 1, this will show as no price change,
- In month 2, we will have a collected price; and
- For month 3, we will carry forward the price collected for month 2 of the current quarter.
In effect, a zero movement is imputed for the two months (month 1 and month 3) where prices are not collected.
In contrast, the quarterly CPI is compiled by assuming that prices collected once during the quarter, represent the price for the entire quarter, regardless of when they were collected during the quarter.
What outputs will be published each month?
A subset of the CPI quarterly outputs will be published monthly. All data will be at the national level, derived as a weighted average of the eight capital cities. This comprises:
- Headline CPI
- The eleven CPI groups
- Selected expenditure classes: Automotive fuel; New dwelling purchase by owner-occupiers; Rents; Domestic holiday travel; International holiday travel; and some Food categories. These expenditure classes represent the majority of goods and services for which monthly price data are available.
Why isn’t monthly inflation data available for capital cities?
The ABS has prioritised the coverage of monthly price collection at the national level. Additional data is required to expand the coverage of the monthly price collection at the capital city level to ensure a high-quality measure of monthly inflation for each capital city.
Will a monthly Trimmed mean and Weighted median be available?
The ABS is working on the development of a monthly CPI seasonally adjusted series. This will enable a monthly measure of the Trimmed mean and Weighted median to be produced.
Does the ABS plan to produce a monthly CPI which measures the entire CPI basket each month?
Over time, the ABS intends to expand the coverage of what is measured on a monthly basis. Further use will be made of administrative data and web-scraped data, where possible, to keep data collection costs low. These changes will be implemented in both the quarterly CPI and monthly CPI indicator.
However, there are constraints in our current systems that will limit the capacity to expand the coverage of what is measured on a monthly basis and the amount of detailed information the ABS can publish each month.
Are there any changes to the quarterly CPI?
Apart from the inclusion of monthly Rents data, which was previously only measured on a quarterly basis, the quarterly CPI remains unchanged.
Both the quarterly CPI and monthly CPI indicator will contain the new monthly Rents administrative data, from the September quarter 2022.
How does Australia’s monthly CPI indicator compare with what other countries do?
Most advanced countries produce a monthly CPI where the majority of the CPI basket is measured each month. Australia’s measure differs in this respect as less than half the CPI basket is measured each month. It is for this reason the ABS considers it an ‘indicator’ rather than a complete monthly measure of CPI inflation.