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Consumer Price Index, Australia

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The Consumer Price Index (CPI) is a measure of household inflation and includes statistics about price change for categories of household expenditure

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Reference period
June 2020
Released
29/07/2020
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Key statistics

  • The Consumer Price Index (CPI) fell 1.9% this quarter.
  • Over the twelve months to the June 2020 quarter the CPI fell 0.3%.
  • Most significant price fall was Child care at-95.0%.
  • Most significant price rise was tobacco at +2.7%.

Main features

Weighted average of eight capital citiesMar Qtr 2020 to Jun Qtr 2020 % changeJun Qtr 2019 to Jun Qtr 2020 % change
All groups CPI-1.9-0.3
Food and non-alcoholic beverages0.54.1
Alcohol and tobacco1.58.4
Clothing and footwear0.10.5
Housing-0.70.1
Furnishings, household equipment and services-11.2-9.8
Health-0.20.9
Transport-6.8-7.5
Communication-1.3-3.6
Recreation and culture-1.0-0.3
Education-3.7-1.0
Insurance and financial services0.31.7
CPI analytical series
All groups CPI, seasonally adjusted-2.0-0.5
Trimmed mean-0.11.2
Weighted median0.11.3

What's new this quarter

Two spotlight articles are included in this release:

  • Spotlight: Underlying inflation measures looks at underlying inflation in the June 2020 quarter using alternative measurement approaches.
  • Spotlight: CPI exclusion-based measures examines the CPI in the June 2020 quarter excluding selected influential movements.


An article was published on 8 July 2020 explaining the impact of COVID-19 on the June quarter CPI.

Main contributors to change

CPI groups


 

Food and non-alcoholic beverages group (+0.5%)

Alcohol and tobacco group (+1.5%)

Clothing and footwear group (+0.1%)

Housing group (-0.7%)

Furnishings, household equipment and services group (-11.2%)

Health group (-0.2%)

Transport group (-6.8%)

Communication group (-1.3%)

Recreation and culture group (-1.0%)

Education group (-3.7%)

Insurance and financial services group (+0.3%)

International trade exposure - tradable and non-tradables

Seasonally adjusted analytical series

Capital cities comparison

All groups CPI

The Consumer Price Index (CPI) fell 1.9% in the June quarter in original terms and fell 2.0% in seasonally adjusted terms. Annually, the CPI fell 0.3%.

  • At the All groups level, all capital cities recorded a fall, ranging from Adelaide (-1.0%) to Darwin (-2.5%).
  • Furnishings, household equipment and services fell in all capital cities due to free child care, which recorded a fall of 95.0% in all cities. Differences in the capital city movements at the All groups level can largely be explained by the weight of child care in each city.
Weight of Child care to the CPI for each capital city
SydneyMelbourneBrisbaneAdelaidePerthHobartDarwinCanberraWeighted average of 8 capital cities
Child care weight (%)1.520.951.310.700.820.701.241.681.17
  • Transport fell in all capital cities due to price falls in automotive fuel with lower oil prices following a drop in global demand. Automotive fuel decreases ranged from -14.1% in Darwin to -20.1% in Perth.
  • Education fell in all capital cities due to price falls for preschool and primary education, due to the effect of free child care on before and after school care. This was combined with free preschool in term 2 for many schools in NSW, Victoria and Queensland, and a refund of compulsory school levies in Tasmania. Falls in preschool and primary education ranged from -2.8% in Perth to -22.6% in Sydney.
  • Housing fell in most capital cities due to rents, with falls ranging from -0.2% in Canberra to -2.0% in Sydney. Hobart and Adelaide were the only cities to record rises in rents, with increases of 0.2% and 0.1% respectively.
  • Annually at the All groups level, there were four capital cities in the June quarter which saw falls ranging from Canberra (-0.6%) to Darwin (-1.8%). The offsetting cities saw rises ranging from Perth (+0.1%) to Hobart (+1.3%).
All Groups CPI, All groups index numbers and percentage changes
Jun Qtr 2020 Index number(a)Mar Qtr 2020 to Jun Qtr 2020 Percentage changeJun Qtr 2019 to Jun Qtr 2020 Percentage change
Sydney114.7-2.3-1.0
Melbourne115.7-1.80.3
Brisbane113.6-2.2-1.0
Adelaide114.6-1.00.8
Perth112.1-1.20.1
Hobart115.6-1.41.3
Darwin109.0-2.5-1.8
Canberra112.8-2.3-0.6
Weighted average of eight capital cities114.4-1.9-0.3

(a) Index reference period: 2011-12 = 100.0.

Capital city highlights:

Sydney (-2.3%)

Melbourne (-1.8%)

Brisbane (-2.2%)

Adelaide (-1.0%)

Perth (-1.2%)

Hobart (-1.4%)

Darwin (-2.5%)

Canberra (-2.3%)

Quarterly percentage change by capital city
IndexSydneyMelbourneBrisbaneAdelaidePerthHobartDarwinCanberraWeighted average of eight capital cities
All groups-2.3-1.8-2.2-1.0-1.2-1.4-2.5-2.3-1.9
Food & non-alcoholic beverages0.50.40.21.00.80.30.30.40.5
Alcohol & tobacco1.61.41.91.71.51.81.81.31.5
Clothing & footwear0.5-0.50.70.4-0.80.11.70.50.1
Housing-1.0-0.6-1.3-0.20.10.2-6.00.0-0.7
Furnishings, household equipment and services-14.7-9.8-11.9-5.5-6.7-6.2-11.3-17.7-11.2
Health-0.1-0.4-0.20.2-0.3-0.91.1-0.7-0.2
Transport-5.9-7.0-7.7-7.4-7.1-6.6-4.5-6.7-6.8
Communication-1.3-1.4-1.3-1.3-1.3-1.3-1.3-1.3-1.3
Recreation & culture-1.3-0.9-1.2-0.3-0.6-0.8-1.2-1.4-1.0
Education-5.8-3.1-3.3-1.9-0.6-6.6-1.8-2.8-3.7
Insurance & financial services0.20.60.40.70.5-0.2-0.20.80.3

Spotlight: CPI exclusion-based measures

The Australian Bureau of Statistics (ABS) produces a range of Consumer Price Index exclusion-based measures, which remove selected components from the CPI basket. Typically, the removed components have volatile price change and/or a pronounced seasonal pattern. These exclusion-based measures can help distinguish short term price fluctuations that impact the quarterly CPI movement providing additional insighs into the general direction of medium-term inflation.

An example of a CPI exclusion-based measure is ‘CPI excluding alcohol and tobacco’, where annual increases in the federal excise tax has a significant effect on tobacco prices each year.

COVID-19 has brought about new challenges in measuring the CPI. For the June 2020 quarter CPI, additional CPI exclusion-based measures have been produced to those previously available in Table 8 of the CPI release. The additional exclusion-based measures, presented in table 1 of this article, help remove some of the temporary impacts of COVID-19 on the June quarter CPI.

Table 1: CPI exclusion-based measure, June 2020 quarter
Quarterly movement (%)Annual movement (%)
Headline CPI-1.9-0.3
CPI excluding child care-0.80.7
CPI excluding automotive fuel-1.30.5
CPI excluding child care and automotive fuel-0.11.6
CPI excluding child care, automotive fuel and preschool & primary education0.11.8

Table 1 shows both the quarterly and annual movements for selected exclusion-based measures and can be used to compare to the headline CPI. For example, when excluding child care and automotive fuel from the CPI, the quarterly movement is -0.1 per cent compared to -1.9 per cent for the headline CPI. This highlights the strong downward impact that free child care and price falls in automotive fuel has had on the June 2020 quarter CPI movement.

How to calculate exclusion-based series

Points contributions, available in table 12 of this release, can be used to calculate exclusion-based measures. The sum of the points contributions of all lower level components equals the overall CPI index value. The points contribution of selected components can then be excluded and the CPI re-calculated.

Measuring the quarterly price change that would occur when excluding a CPI component is calculated by subtracting the points contribution of the CPI component from the CPI index number in each quarter and then calculating the percentage change between the resulting index. ‘CPI excluding automotive fuel’ series has been used as an example in table 2.

Table 2: Calculating exclusion-based measure example
Jun-20Mar-20
All Groups index114.4116.6
Automotive fuel Points Contribution3.264.05
All Groups minus Automotive fuel111.14112.55
Quarterly movement (111.14-112.55)/112.55 *100 (%)-1.30

Table 2 shows that prices of all items other than automotive fuel decreased by 1.3 per cent on average between the March 2020 quarter and June 2020 quarter.

The June 2020 quarter saw COVID-19 have a significant impact on a range of CPI components. This article has demonstrated how excluding these components from the headline CPI provides new insights into the level of inflation in the Australian economy.

Spotlight: Underlying inflation measures

The Trimmed Mean and Weighted Median provide important insights into underlying inflation and the health of the Australian economy. These measures are derived from the Consumer Price Index (CPI) by removing atypical movements from the quarterly CPI, and recalculating a quarterly movement. Full details of the methods can be found in Explaining the Trimmed Mean and Weighted Median.

The COVID-19 pandemic has resulted in some extremely large price changes, such as the significant fall in automotive fuel prices and the provision of free childcare for Australian families. The underlying inflation measures reduce the influence of these large price movements, and thereby provide a measure of medium-term inflation.

As discussed in Measuring the CPI during a time of COVID-19, in the June 2020 quarter, prices for five series were imputed to have a quarterly change equal to that of the headline CPI, rather than being measured. The five series were: Urban transport; Domestic holiday travel and accommodation; International holiday travel and accommodation; Sports participation; and Other recreational, sporting and cultural services. These five series contribute a weight of 9 per cent to the CPI.

Imputing price movements for these series presented the challenge of how they should contribute to the underlying inflation measures. The two options considered by the ABS were:

  1. Use all 87 CPI series, including the five imputed series, in the calculation of the Trimmed Mean and Weighted Median.
  2. Exclude the five imputed series and calculate the Trimmed Mean and Weighted Median using the remaining 82 CPI series.


In order to maintain consistency in the methods used, the ABS selected option 1 for the official measures presented on the Main Features page of the June quarter CPI release. In this article, table 1 presents the quarterly and annual movements for both options 1 and 2.

Table 1. June quarter 2020 Trimmed Mean and Weighted Median, including and excluding imputed series
Including imputed series (Option 1) Quarter (%)Including imputed series (Option 1) Annual (%)Excluding imputed series (Option 2) Quarter (%)Excluding imputed series (Option 2) Annual (%)
CPI-1.9-0.3-1.9-0.3
Trimmed Mean-0.11.20.11.5
Weighted Median0.11.30.21.5

By construction, the price change for the five imputed series is the same as for the headline CPI. As the headline CPI recorded a fall of -1.9 per cent in the quarter, including the five imputed series has a downward impact on the underlying inflation measures. Excluding these series from the calculation means the underlying inflation measures for option 2 are slightly higher.

Chart 1 shows that when included in the calculations, only one and a portion of another of the imputed series are trimmed from the Trimmed Mean, while the remaining imputed series contribute to the movement. Chart 2 shows the calculation of the two measures when the five imputed series are excluded.

Chart 1. June quarter Trimmed mean and Weighted median including imputed series (option 1)

Graph showing option one June quarter Trimmed mean and Weighted median including imputed series
Graph showing option one June quarter Trimmed mean and Weighted median including imputed series

Chart 2. June quarter Trimmed mean and Weighted median including imputed series (option 2)

Graph showing option two June quarter Trimmed mean and Weighted median including imputed series
Graph showing option two June quarter Trimmed mean and Weighted median including imputed series

Article archive

CPI enhancements

CPI feature articles

CPI 17th series review

Selected tables - capital cities

1 All groups CPI, index numbers(a)

2 All groups CPI, percentage changes

3 Longer term series: all groups CPI, weighted average of eight capital cities, index numbers

Data Downloads

Time Series Spreadsheets

Data files

  • TABLES 1 and 2. CPI: All Groups, Index Numbers and Percentage Changes

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  • TABLES 3 and 4. CPI: Groups, Weighted Average of Eight Capital Cities, Index Numbers and Percentage Changes

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  • TABLE 5. CPI: Groups, Index Numbers by Capital City

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  • TABLE 6. CPI: Group, Sub-group and Expenditure Class Contribution to Change in All Groups Indexes, by Capital City

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  • TABLE 7. CPI: Group, Sub-group and Expenditure Class, Weighted Average of Eight Capital Cities

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  • TABLE 8. CPI: Analytical Series, Weighted Average of Eight Capital Cities

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  • TABLE 9. CPI: Group, Sub-group and Expenditure Class, Index Numbers by Capital City

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  • TABLE 10. CPI: Group, Sub-group and Expenditure Class, Percentage change from corresponding quarter of previous year by Capital City

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  • TABLE 11. CPI: Group, Sub-group and Expenditure Class, Percentage change from previous quarter by Capital City

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  • TABLE 12. CPI: Group, Sub-group and Expenditure Class, Points Contribution, by Capital City

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  • TABLE 13. CPI: Group, Expenditure Class and Selected Analytical Series Index Numbers, Seasonally adjusted, Weighted Average of Eight Capital Cities

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  • TABLE 14. CPI: Expenditure Class, Combined seasonal adjustment factors, Weighted Average of Eight Capital Cities

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All time series spreadsheets

Data files
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Use of price indexes in contracts

Price indexes published by the Australian Bureau of Statistics (ABS) provide summary measures of the movements in various categories of prices over time. They are published primarily for use in Government economic analysis. Price indexes are also often used in contracts by businesses and government to adjust payments and/or charges to take account of changes in categories of prices (Indexation Clauses).

Use of Price Indexes in Contracts that sets out a range of issues that should be taken into account by parties considering including an Indexation Clause in a contract using an ABS published price index.

Frequently asked questions

The Frequently Asked Questions page that has answers to a number of common questions to do with price indexes and the Consumer Price Index, in particular.

Previous catalogue number

This release previously used catalogue number 6401.0.

Methodology

Consumer Price Index, Australia methodology, June 2020

Media releases