Inflation hits everyone differently – How have soaring prices impacted you?

Prices accelerated again in the June quarter. The broad Consumer Price Index is 6.1% higher than it was a year ago. But that economy-wide measure will differ from many people’s experiences, so we’ve created a tool to calculate personal inflation rates.

The CPI captures how prices across the entire economy are changing. The Australian Bureau of Statistics tracks price changes across a basket of approximately 1000 goods and services and weights each item by how much the typical household spends on it.

When the price of bread goes up, it moves the CPI more than if fine wine or caviar do. In the June quarter, two of the biggest price increase were housing and food. These are also the two largest categories of spending, so these changes made a big difference to the overall figure.

The result is divergent experiences of inflation. Clothing and footwear rose the most in the June quarter at 3.5%, but it’s also one of the smallest categories. However, those who regularly buy clothes will be feeling the pinch.

Doing it yourself

Using the spreadsheet is simple.

1. Click here to download the spreadsheet and save a copy on your computer

2. In the “Amount your spent over the quarter” column input the amounts that you spent on each category (if you’re not sure how much you spent over the quarter, just multiply your monthly spend by three as a rough approximation)

3. The spreadsheet will automatically calculate your personal rate of inflation for each category (Column F) and your overall personal rate inflation (Cell F17)

Note: If you are confused as to why this isn’t similar to the headline rate of 6.1%, please keep in mind this is a quarterly rate, instead of annual.

Morningstar’s example

I calculated my own personal rate of inflation as an example below. At 2.1% over the June quarter, prices for the goods and services I buy rose faster than the 1.8% notched by in the CPI.

The culprits were clothing and footwear, food and rent.

I spent more of my income on housing than Australian households which experienced price inflation of 2.5% over the quarter, pushing my personal CPI figure up. I also spent more on clothing and footwear than the average Australian household which had a major impact on our CPI with the category experiencing the largest price increase over the quarter jumping 3.5%.

On the other hand, I spent less on furnishing, household equipment and services than the average household.