Monthly Trimmed Mean CPI MoM

Monthly Trimmed Mean CPI MoM tracks underlying Australian inflation by trimming extreme price moves. It draws on the Consumer Price Index (CPI) basket of household goods and services from the Australian Bureau of Statistics (ABS).

It covers private households in the eight capital cities as a national result, with no rural coverage. It reflects all covered households rather than an average household, and it never compares price levels across cities. The quarterly series dates to 2007, in its current form since 2011, while headline inflation stays the original All groups CPI.

Collectors spread prices across the weeks of the month, pricing each item in the same week every month. Scanner and fuel prices arrive daily or weekly where available, a few items yearly, and almost 900,000 prices feed each month. It is released monthly on the last Wednesday for the previous month, at 11:30am AEST or AEDT on the ABS website. The December issue follows in early January, about four weeks after the reference month.

Each release brings main-features commentary, All groups CPI, group detail, underlying measures such as Weighted median, quarterly tables every third issue, and time-series spreadsheets. Original indexes stay final except to correct a significant error. Seasonally adjusted results, including the trimmed mean, revise each month as new months enter estimation, with annual reanalysis.

The 11 expenditure groups move it. The weights below are an example structure, updated yearly rather than a fixed rule.

• Housing, 21.4%: rents, new homes for owners, repairs, rates, water, electricity and gas.
• Food and non-alcoholic beverages, 17.4%, and alcohol and tobacco, 6.5%: groceries, meat, dairy, fruit, vegetables, drinks, alcohol and tobacco products.
• Transport, 11.5%, and recreation and culture, 13.1%: cars and parts, automotive fuel, repairs, transport services, holiday travel and accommodation, leisure goods and services.
• Furnishings, household equipment and services, 7.9%, and health, 6.7%: furniture, appliances, household goods and services, medicines, therapeutic goods, medical, hospital and dental services.
• Education, 4.7%, and insurance and financial services, 5.6%: school fees and insurance and financial items.
• Clothing and footwear, 3.2%, and communication, 2.1%: garments hit by seasonal sales, and telecom and postal services.

In the October 2024 release, published November 27, 2024, headline inflation held at 2.1% over the year. Annual trimmed mean inflation rose to 3.5% from 3.2% in September. Electricity fell 35.6% amid government bill relief and automotive fuel fell 11.5%, while holiday travel and accommodation rose 8.0% and rents rose 6.7%. Those extremes sat in the trimmed tails, so the trend stayed high while the headline stayed low.

The steady headline beside a higher trimmed mean shows temporary falls trimmed away to reveal trend. The reverse also holds when large spikes surge and are trimmed.

1. Percent change: subtract the earlier index from the later one, divide by the earlier index and multiply by 100, for monthly and annual moves.
2. Seasonal adjustment: adjust seasonal classes with the concurrent method each month, then combine them into seasonally adjusted All groups.
3. Relative weights: rank all 87 classes from lowest to highest on seasonally adjusted change, weight each by its previous-month share, then cumulate.
4. Trimming: drop classes below 15% and above 85% of cumulative weight, split border classes, then average the middle 70% of monthly changes by weight. The Weighted median, at the fiftieth percentile, is a sibling measure. Example: five classes carry weights of 10, 20, 40, 20 and 10, with changes of -2.0%, 0.1%, 0.3%, 0.6% and 5.0%. Keeping slices from 15% to 85% gives about 0.3%, since extremes do not decide it.
5. Rounding: publish headline indexes to two decimals and trimmed mean to four, then round percent moves to one decimal.