ABS finds error in CPI data

The ABS has discovered errors in its inflation data, prompting a minor downward revision to one measure of underlying inflation.

The discovery of errors in its data has prompted the Australian Bureau of Statistics to correct its recent inflation figures.

The mistake affected the calculation of two measures of underlying inflation favoured by the Reserve Bank of Australia, the trimmed mean and weighted median.

Economists see these measures, which exclude components of the consumer price index (CPI) posting large one-off rises and falls each quarter, as key to the RBA's stance on monetary policy.

The weighted median's change in the June quarter was reported last week as 0.7 per cent, but has now been revised back to 0.6 per cent.

The annual rise stays at 2.6 per cent, thanks to an upward revision to an earlier quarterly increase.

The latest readings on the trimmed mean measure have not been revised - they remain at 0.5 per cent for the quarter and 2.2 per cent through the year.

The seasonally adjusted version of the CPI was also revised for some earlier quarterly changes, but the latest annual rate has been kept at 2.3 per cent.

Headline CPI, which forms the basis for many contracts and indexed payments, was also not affected by the problem.

The news that one measure of underlying inflation is marginally lower than previously reported has not affected expectations for the RBA board's monthly monetary policy meeting on Tuesday next week.

The futures market ended Wednesday's trading session with an implied probability of an interest rate cut next week already at 96 per cent.

It barely budged from that position during Thursday's session.

The main effect of the revisions is likely to be embarrassment for the ABS, even though such errors in the massive volume of statistics the bureau generates are rare.

"The ABS have instigated a full review of the circumstances leading up to the release to understand why the error occurred and to prevent it from happening again," the bureau said.


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Source: AAP


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