The Melbourne Institute’s Inflation Gauge is an attempt to replicate the ABS consumer price index (CPI) on a monthly basis. It has turned out to be a reliable leading indicator of the CPI, although there are periods in which the Inflation Gauge and the CPI have diverged for as long as twelve months. On average, the Inflation Gauge’s annual rate tends to overestimate changes in CPI inflation by an average of about 0.1% per quarter.
The Inflation Gauge index increased by 0.2% during April after a 0.4% increase in March and a 0.1% increase in February. On an annual basis, the index increased by 1.8%, down from March’s comparable rate of 2.1%. For the purposes of comparison, the CPI has grown at a compound rate of 2.1% since the beginning of April 2009.