The consumer price index (CPI) measures changes in the prices of a fixed basket of goods and services bought by Australian households. Published by the Australian Bureau of Statistics, its rate of change is what is usually meant by inflation, and it guides Reserve Bank policy decisions.
The basket is the heart of the method. The Australian Bureau of Statistics prices thousands of items, from food and rent to insurance and holidays, weighted by how much households actually spend on each. The index number itself is arbitrary; the information is in its movement, and the annual percentage change is the inflation rate quoted in the news.
The ABS publishes the CPI monthly, on the last Wednesday of the month for the month before. A quarterly series is still produced for indexation and contracts, derived as the average of the three monthly indexes in the quarter. Policy discussion often focuses on the trimmed-mean measure, which strips out the largest one-off price swings to expose the underlying trend the Reserve Bank targets.
Two rates come out of one series and they are not the same number. Suppose a quarterly index reading of 107.9, against 107.1 one quarter earlier and 104.2 four quarters earlier, all three illustrative. The Australian Bureau of Statistics calculates percentage change movements from the rounded index numbers and rounds the result to one decimal place, so the quarterly movement is 0.8 divided by 107.1, published as 0.7 per cent. Compound that pace across four quarters, as 1.007 to the fourth power, and it comes to 2.8 per cent a year. The through-the-year movement instead sets the latest reading against the one twelve months earlier, the comparison the ABS describes for its annual figure: 3.7 divided by 104.2, or 3.6 per cent. One number annualises a single quarter; the other counts all four, including the three the first has left behind.
This page defines the measure; the current figures and their history live on Tradergy’s inflation page, sourced from the ABS, and the inflation calculator applies the same series to any dollar amount across years.
Longer read: How the trimmed mean and weighted median are built. Australia's underlying inflation measures do not exclude a list of volatile categories. They exclude positions in a distribution, recalculated every period, which is why nothing is permanently in or out of them.
For the live side of this definition, head to the live inflation page.
Related terms
Cash rate · GDP · Unemployment rate · All terms
Primary authority: ABS Consumer Price Index. Definition reviewed against the authority’s published material; this page is reference information, not advice.
Common questions
Is CPI the same thing as inflation?
Effectively, in everyday Australian usage. Inflation is the general rise in prices; the CPI is the official instrument that measures it for households. When a news report cites "inflation of three per cent", it is quoting the annual change in the CPI.
Why does my cost of living feel different from the CPI?
The CPI tracks an average household basket, and no real household is average. Renters, mortgage holders and outright owners face different pressures, and anyone whose spending leans toward fast-rising categories will experience more inflation than the headline number suggests.
How often is the CPI published?
Monthly, by the Australian Bureau of Statistics, about four weeks after the reference month ends - on the last Wednesday of the month, except the December figure, which appears in early January. A quarterly series is still published for indexation and contracts, calculated as the average of the three monthly indexes in that quarter.