Inflation Rate MoM

Inflation Rate MoM is the monthly percentage change in the Australian Consumer Price Index (CPI), a basket of household goods and services. The Australian Bureau of Statistics (ABS), the national statistics agency, compiles it as a weighted average across 8 capital cities for each calendar month. The basket holds 87 expenditure classes in 11 groups, weighted by annual household spending shares. It is not a cost-of-living index for any single household, and it does not cover rural areas.

Prices are collected through each calendar month: daily or weekly for some items, monthly for most weight and yearly or quarterly for the rest. Results appear around 4 weeks after month end at 11:30am Canberra time, except the November result, which appears in January. Each release shows the national index with monthly and annual changes, contributions in points and seasonally adjusted series. The original index is rarely revised, adjusted series revise monthly, and the Reserve Bank of Australia (RBA) targets 2% to 3% annual inflation.

Moves reflect spending shares, with housing largest and volatile travel and fuel often swinging monthly results.

• Housing, 21.39%: rents, new homes bought by owner-occupiers and utilities.
• Food and non-alcoholic beverages, 17.44%: groceries, meals out and takeaway, bread, cereals, meat and seafood.
• Recreation and culture, 12.74%: holiday travel and accommodation plus entertainment.
• Transport, 11.45%: automotive fuel, motor vehicles and fares.
• Furnishings, household equipment and services, 8.02%: furniture, appliances and household services such as hairdressing.
• Other components, 28.96%: health (6.73%), alcohol and tobacco (6.58%), insurance and financial services (5.58%), education (4.69%), clothing and footwear (3.25%) and communication (2.13%).

In December 2023 (released January 31, 2024), annual inflation was 3.4%, down from 4.3% in November. Excluding volatile items and holiday travel, it was 4.2%, down from 4.8%, while trimmed mean was 4.0%, down from 4.6%. Electricity fell 5.7% in the month on a second Perth rebate instalment, with electricity at 0.4%, while rents rose 7.4% and holiday travel fell 9.1%. The annual fall partly reflected base effects, as the 4.0% monthly rise of December 2022 left the yearly window.

1. Collect: Prices are gathered each month, with daily or weekly collection for scanner groceries and fuel and yearly or quarterly collection for the rest.
2. Carry forward: Where an item has no new price in a month, the last collected price carries forward with zero monthly movement.
3. Combine: Price changes for 87 classes join by spending weights into a single All-groups index, averaged across 8 capital cities.
4. Express change: MoM% = (reference-month index minus previous-month index) / previous-month index x 100; annual change compares to the same month 1 year earlier. Published changes derive from rounded indexes.
5. Worked example: July 2022 index was 114.2 against 113.5 in June 2022, up 0.7 index points or 0.6%. Against 106.7 in July 2021, the rise was 7.5 index points or 7.0%.
6. Adjust: Seasonally adjusted series remove normal seasonal patterns; trimmed mean averages the middle 70% of ranked changes and weighted median, the middle-ranked change, trims spikes.