Make sense of the numbers.

“n.e.c.” stands for not elsewhere classified. It is an ABS classification term for products or services not listed under another, more specific category. We retain the official category names so they match the published data.

Not necessarily. If inflation falls from 5% to 3%, the overall price level is still rising, just more slowly. A negative annual rate means prices are lower than a year earlier. A fall in the price level is deflation. Individual categories can fall while the overall basket rises.

The CPI describes a representative spending basket. Your mix of purchases may be different, and you may encounter particular price changes more often. It is a national price measure, not a personalised household bill.

Headline inflation covers the overall CPI basket. The trimmed mean reduces the influence of unusually large price rises and falls by trimming the ends of the distribution by expenditure weight. It helps reveal the broader pattern of inflation. It does not simply exclude a permanent list of categories.

A category’s impact depends on its price movement and its importance in the basket. Weight is expressed as a percentage of the basket. Contribution is expressed in percentage points of inflation. If total annual inflation is 1.0%, a contribution of 0.2 percentage points accounts for 0.2 of that 1.0; it is not the category’s own inflation rate. A rate rising from 4% to 5% rises by 1 percentage point, not 1%. A large price rise in a small category can matter less than a modest rise in a large category.

Successive changes compound. A 10% rise followed by another 10% rise takes a $100 basket to $121. For historical comparisons, we compare official price-index levels rather than add annual inflation rates.

If prices rise and the number of dollars you hold stays the same, those dollars buy less. The value-of-$1 tool shows the change in consumer purchasing power. Whether wages or investments keep pace is a separate question.

Inflation is an important consideration for monetary policy, alongside the broader economy and labour market. A single inflation result does not determine the next interest-rate decision. This site explains the data without treating it as a rate forecast.

The ABS calls these categories non-discretionary and discretionary. Non-discretionary items meet basic needs, maintain existing living arrangements or fulfil legal obligations. Discretionary items are more optional purchases, such as holidays, alcohol and takeaway meals.

This is a statistical classification, not a judgement about anyone’s choices. Needs differ between households. The split is made at detailed CPI component level, so a broad category such as food can contain both types.

These measures show price changes, not the dollars households spend. The ABS first published experimental measures in November 2020 and extended the history to 2005 in May 2021. Regular quarterly publication began with the September 2021 quarter.

These living-cost measures include mortgage interest. CPI treats owner-occupied housing differently, including new dwelling construction costs rather than mortgage interest. Neither measure includes the purchase price of land.

The living-cost indexes use an outlays approach: they focus on expenses incurred to maintain a household’s living standard. CPI uses an acquisitions approach: it records prices of goods and services acquired in the period. The different treatment of interest can make the measures move differently.