Monthly Consumer Price Index Indicator, April 2023

Nov 06, 2023

Detail

The monthly CPI indicator is a measure of inflation and includes statistics about prices for categories of households expenditure

Detail

Following the monthly Trimmed mean being discontinued in December 2022, the ABS undertook an investigation to explore alternative measures. This release includes two new indicators of underlying inflation: ‘Annual trimmed mean’ and ‘CPI excluding volatile items and holiday travel’. The investigation found these two measures provide a reasonable indicator of the principal measure of underlying inflation, which is the quarterly Trimmed mean, published in the quarterly CPI publication. The previously published series 'CPI excluding volatile items' will be available in the spreadsheets under 'Data downloads'. Further details of the investigation are available in About the monthly CPI indicator.

In addition, this release includes a table of detailed monthly data for the 87 expenditure classes measured in the CPI. The table provides the monthly movements for the three most recent months. Prices for some expenditure classes are collected less frequently than monthly. In these cases, prices from the previous period are carried forward, resulting in a zero movement for the months that prices are not collected. The months where a zero movement has been imputed for these expenditure classes are indicated as 'imp'. This table is available in the Detailed monthly data and will be updated each month in future releases of the monthly CPI indicator. As previously stated, the monthly CPI indicator data may be subject to revisions. Any revisions to data will be marked as revised in the table.

Also released today is an article on CPI international comparisons, which provides analysis of inflation in Australia compared to selected countries and explains how measurement of the CPI differs between countries.

Feb 22 to Feb 23

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Mar 22 to Mar 23

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Apr 22 to Apr 23

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*Volatile items are Fruit and vegetables and Automotive fuel

The monthly CPI indicator annual movement rose 6.8% in April, up from 6.3% in March.

The annual movement for the monthly CPI excluding volatile items and holiday travel rose 6.5% in April, down from 6.9% in March. This series excludes Fruit and vegetables, Automotive fuel and Holiday travel and accommodation.

Annual trimmed mean rose 6.7% in the year to April.

*Volatile items are Fruit and vegetables and Automotive fuel

New dwelling prices rose 9.2% in the year to April reflecting labour and material cost increases. Fewer grant payments from the Federal Government's HomeBuilder program and similar state-based housing construction grants also contributed to the rise in new dwelling prices over the year.

The rate of price growth has continued to ease compared to the record high increase of 21.7% for the year to July 2022. This reflects a softening in new demand and improvements in the supply of materials.

Rent prices increased 6.1% in the year to April 2023, up from 5.3% in March, with low vacancy rates reflecting strong demand for rental properties and tight rental markets.

Food and non-alcoholic beverages rose 7.9% in the year to April 2023, with price rises seen across all food categories. These increases reflect price pressures from higher input costs.

The main contributors were:

In monthly terms, broad-based price rises were seen across all categories with the exception of Fruit and vegetables due to improved supply for fruit items such as avocados and bananas.

Automotive fuel prices rose 9.5% in the year to April 2023, which follows a fall of 8.2% in March. The increase in the annual movement in April is largely due to base effects from the changes to the fuel excise tax introduced on 30 March 2022. The 22 cents per litre fuel excise cut saw a monthly fall of 13.8% in automotive fuel prices in April 2022. The fall in April 2022 no longer contributes to the annual movement for April 2023.

In monthly terms, Automotive fuel prices rose 2.9% due to higher wholesale prices being passed onto consumers.

Holiday travel and accommodation rose 11.9% in the year to April, down from 13.9% in March. While demand and prices remain elevated for both Domestic and International holiday travel and accommodation, prices have fallen since peaking in December 2022.

In monthly terms, Holiday travel and accommodation prices rose 7.2% in response to demand for domestic accommodation over the Easter and school holiday period.

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Data explorer for the monthly CPI indicator.

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2022

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2021

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Change

The monthly Consumer Price Index (CPI) indicator was developed to provide inflation data at a higher frequency for use by governments, economists and the wider community. The quarterly CPI remains the principal measure of household inflation.

The monthly CPI indicator is derived using available data from the quarterly CPI. The ABS collects prices for the CPI in a range of frequencies including monthly, quarterly, and annual. The frequency of price collection is determined by how often prices change. Where price change occurs frequently, such as for food and petrol, monthly price data is collected. Where price change is less frequent, such as for restaurant meals and hairdressers, price data is available quarterly. In some cases, prices are collected once per year where it is known prices only change annually. This is the case for some education fees, property rates and private health insurance.

For this reason, the composition of the monthly CPI basket varies across the three months of the quarter, details of the monthly coverage composition are detailed in Table 1 below.

Table 1. What's price updated - monthly breakdown

* n.e.c Not elsewhere classified

The December 2022 release of the monthly CPI indicator stated

"The release of the monthly CPI indicator includes a Trimmed mean series which was intended to provide additional analytical insights into inflation on a monthly basis. The ABS has identified that the Trimmed mean series is not, however, providing a reliable indicator for the principal measure of trimmed mean inflation published in the quarterly CPI publication. The ABS will suspend the publication of the monthly Trimmed mean series while we investigate."

Since this decision the ABS has investigated the monthly trimmed mean measure and assessed alternative measures of underlying inflation.

The investigation found there was a downward bias in the monthly Trimmed mean when compared to the quarterly Trimmed mean, which is considered the principal measure of underlying inflation (see figure 1). The bias was evident during a period of rising inflation caused by the use of carry forward imputation for some monthly data. Details on the carry forward imputation approach are provided in Introducing a monthly CPI indicator. Carry forward imputation is not used in the quarterly CPI and therefore does not affect the quarterly Trimmed mean.

The ABS assessed variations of established measures of underlying inflation. Two alternatives were found to be a reasonable indicator of annual movements of the quarterly Trimmed mean:

For holiday travel, it has been shown that events such as Christmas and Easter, as well as school holidays, have a significant impact on airfare and accommodation prices. This sees monthly movements for holiday travel as quite volatile. By calculating a series that excludes the monthly movements of holiday travel and the other volatile items, the monthly movements at the aggregate CPI level provide a reasonable insight of underlying inflation.

Figure 1 compares the annual movements of the two new series with the quarterly trimmed mean annual movement. Also included is the monthly trimmed mean annual movement, which shows a clear downward bias.

CPI international comparisons, 31 May 2023

Monthly CPI indicator rose 6.8% in the year to August, 29 September 2022

Introducing a monthly Consumer Price Index (CPI) indicator for Australia, 16 August 2022

Introducing a monthly CPI indicator, 16 August 2022

ABS to release new monthly CPI Indicator, 10 August 2022

New data source

What the CPI Rents series measures

Price indexes published by the Australian Bureau of Statistics (ABS) provide summary measures of the movements in various categories of prices over time. They are published primarily for use in Government economic analysis.

Consistent with existing policy, the ABS does not comment on the use (or otherwise) of the price indexes we publish. However, 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.

Use of Price Indexes in Contracts sets out a range of issues that should be taken into account by parties considering including an Indexation Clause in a contract using an ABS published price index.

Frequently Asked Questions (FAQs) specific to the monthly CPI indicator can be found in the Information paper: Introducing a monthly CPI indicator for Australia FAQs

In addition, the Frequently Asked Questions page has answers to a number of common questions to do with price indexes and the quarterly Consumer Price Index in particular.

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