CPI - A WIDELY USED ECONOMIC INDICATOR RELEASED QUARTERLY
1.1 The Consumer Price Index (CPI) is an important economic indicator. It provides a general measure of changes in prices of consumer goods and services purchased by Australian households. The CPI is used for a variety of purposes, such as in the development and analysis of government economic policy, the adjustment of some government benefits and in individual contracts. Because of this, the CPI directly or indirectly affects all Australians.
1.2 CPI figures are produced by the Australian Bureau of Statistics (ABS) for each quarter (three months ending March, June, September and December) and are released on the fourth Wednesday after the end of the reference period. They appear in the publication Consumer Price Index, Australia (cat. no. 6401.0). In addition, all CPI results appear on the ABS website http://www.abs.gov.au.
CPI NOW COMPRISES 16 LINKED SERIES
1.3 The CPI was first compiled in 1960 with series extending back to the September quarter 1948. The CPI was preceded by five series of retail price indexes compiled by the (then) Commonwealth Bureau of Census and Statistics as far back as 1901. These series were titled the A, B, C, and D Series, and the Interim Retail Price Index respectively. The C Series Index, which began in 1921, was the principal retail price index in Australia prior to the introduction of the CPI in 1960.
1.4 The introduction of the CPI heralded a change in the approach to measuring retail price movements. Rather than compiling a set of discrete fixed–weighted indexes, the objective became to produce a series of short–term fixed–weighted indexes that were to be regularly linked together to provide a single continuous measure of price change. This strategy was adopted to ensure that, at any point in time, the weighting patterns and item coverage of the CPI were relevant to user requirements and reflected contemporary economic conditions as well as possible. The CPI now comprises sixteen linked indexes. The CPI originally consisted of weights from 1948. Weights were updated in 1952 and subsequently in 1956, 1960, 1963, 1968, 1973, 1974, 1976, 1982, 1987, 1992, 1998, 2000, 2005 and 2011.
1.5 The purpose of this guide is to provide a broad overview of the CPI; how to use the CPI and how the CPI is calculated. It takes into account changes made with the introduction of the 16th series CPI in the September quarter 2011 and is suitable for general users.