Whenever I heard of CPI, I always thought of first aid resuscitation (but that’s CPR, Flux fam). CPI is a whole other kettle of fish.
Whenever I heard of CPI, I always thought of first aid resuscitation (but that’s CPR, Flux fam).
CPI stands for the Consumer Price Index. It shows the average change in prices paid by Aussie households for a basket of goods and services across a period of time.
CPI is used by the Government to measure inflation, which is the increase in the price of this basket - aka, the reason a milk carton cost 50 cents in the 80s, and $4 now.
It’s actually pretty simple.
The ABS will collect prices for thousands of items. We’re talkin’ everything from bananas and OJ to books and petrol.
Then, they group these items into 87 categories and 11 groups. And every quarter, the ABS calculates the price change of these items from the previous quarter.
And it doesn’t stop there, Flux fam. The ABS will then use the price change to work out the inflation rate of the entire CPI basket.
And that figure becomes our inflation rate.
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