The CPI Inflation Rate Rises

cpi inflation rate

While the cpi inflation rate is a common measure of inflation, it has also undergone some revisions recently. Prior to seasonal adjustment, the cpi inflation rate was 1.3 percent. This rise is not surprising. While a small amount of movement has been present, it has increased to a much higher percentage level this time around.

This is primarily due to changes in the price of motor fuel. The change in motor fuel price contributed negatively to the 12-month rate between March 2020 and February 2021, and then positively in March and April 2022. The increase was the highest since April 2010.

1.3 percent prior to seasonal adjustment

The annual Consumer Price Index (CPI) inflation rate is calculated using twelve-month selections. Historically, the CPI has varied from eight to nine percent. However, the 1.3 percent prior to seasonal adjustment is unusually high. This is because companies generally increase prices at the beginning of the year. Thus, the seasonal adjustment does not reflect the disproportionately high increase in January. It should be noted that the 1.3 percent prior to seasonal adjustment is higher than the annual rate.

The CPI measures prices for goods and services. The CPI also includes methodological differences between the two indexes. Compared to October’s CPI, the November CPI showed a fall of 0.3%. Various background notes are provided in the annex to this note.

Alternatively, you can contact the ABS. In the meantime, you can use the 1.3 percent prior to seasonal adjustment CPI to estimate inflation.

The CPI inflation rate overstates the actual rate of price increases by 1.3 percentage points every year prior to 1996. This extra 0.2 percentage point is due to a formula bias introduced in 1978, which was fixed this year.

However, there has likely been a substantial bias in the CPI inflation rate for decades. This bias will be even greater in the future. A larger difference will be evident in future reports, as the CPI will have to adjust for a more permanent change in the formula used to calculate it.