Activity 5l: A monthly Consumer Price Index (CPI)
- The CPI monthly measure of inflation includes a survey of the prices of fewer goods and services and, therefore, takes less time to compile. As such, it provides a more timely measure of inflation and provides policymakers (e.g. the RBA) with additional information relating to price changes compared to the less frequent quarterly CPI. However, the quarterly CPI remains the principal measure of inflation in Australia and is the inflation measure that is focused on more closely by the government and analysts.
- A benefit is the fact that it is more timely and, therefore, has the potential to contribute to better policy making. A cost is that it does not include the same array of prices that is contained in the quarterly CPI and is, therefore, less indicative of inflation movements in the economy.
- The top contributors to the annual movement were Housing (+2.6 per cent), Food and non-alcoholic beverages (+3.4 per cent), and Alcohol and tobacco (+6.6 per cent).
- Automotive fuel was 7.6 per cent lower than August 2023 after price falls in recent months due to lower global oil prices. The impact of Energy Bill Relief drove the largest annual fall in electricity prices on record of 17.9 per cent, which ensured that growth of prices in the Housing category was kept to a very low 2.6%.
- Given that these price changes are typically one-off in nature (and/or represent the bottom 15% of price changes), they are excluded from the underlying measures of inflation. Accordingly, the headline rate of inflation for this time was above the underlying measures (such as the RBA trimmed mean).