The Melbourne Institute’s Inflation Gauge is an attempt to replicate the ABS consumer price index (CPI) on a monthly basis instead of quarterly. It has turned out to be a reliable leading indicator of the CPI, although there are periods in which the Inflation Gauge series and the CPI have diverged, only for the two series to eventually converge over the space of six to twelve months.
During June, the Inflation Gauge increased by 0.1%, which is 2.3% higher than a year ago. Core measures of inflation, such as the Melbourne Institute’s version of “trimmed mean”, increased by 0.2% for the month or 1.9% on an annualised basis. This takes the core measure back below the lower boundary of the RBA’s target range.