|Adjustments||Not Seasonally Adjusted|
Consumer Price Index: The Consumer Price Index (CPI) is the most common measure of changes in prices. It is used as a measure of inflation and in negotiations. When using the CPI for negotiations, the index itself is usually used, and not the inflation rate.
Harmonized Index of Consumer Prices: The method for calculating the CPI varies in different countries and can cause problems for international comparisons. To address this problem, a harmonized index of consumer prices (HICP) have been developed within EU, based on coordinated methodology. HICP is a fundamental indicator for the European Central Bank (ECB) in evaluating EMU's monetary policy goals. HICP is also used to follow up the convergence criteria for price stability with regards to membership in EMU.
Underlying Inflation: Statistics Sweden calculates and publishes two measures of underlying inflation, called CPIX and CPIF, on behalf of the Swedish Central Bank. Up to October 2007 the underlying inflation measures were called UND1X and UNDINHX. At this time UNDINHX was removed and UND1X changed its name to CPIX, however no changes in the calculating method were made. Starting in July 2008 a new measure called CPIF (CPI with fixed interest rate) was established. The purpose of alternative measures of inflation is to exclude temporary effects on inflation measured by CPI, such effects are normally unimportant for monetary policy.
Consumer Price Index:
The CPI shows the development of average consumer prices for all private domestic consumption. The prices that are measured are those that the consumers actually pay and are thus affected by changes in value-added taxes and subsidies. Direct taxes and social benefits are not considered when the index is calculated.
Certain entries for private consumption according to the national accounts are not included. This is true for artwork, fees for childcare and elder care, and consumption in non-profit organizations
Since it is difficult in practice to measure prices for all goods and services that are consumed, prices are collected for a representative basket of goods and services, called representative products. The relative importance of different representative products is given using weights. These weights show how large of a share, in terms of value, the different chosen products have of the total private domestic consumption.
Prices are collected by Statistics Sweden's enumerators through visits to stores and by telephone or centrally from Statistics Sweden. Price information is collected for the 15th of the month, or during the week that the 15th falls.
The sample of representative products and their weights are revised at the beginning of each year. Changes in the composition of consumption are gradually reflected in the CPI through this process. Information from the national accounts about the composition of private consumption (information for three quarters plus the forecast for the fourth quarter) is used as the basis for revising the weights.
The CPI is computed as a chain index with annual links. Each annual link measures how much the average price level in the year concerned has changed from the average price level of the preceding year with weights based on the geometric mean of the consumption volumes of the two years concerned. Price changes that could not be included in the calculations during the year are also included in this link. In addition, certain methodological changes and adjustments caused by better statistical information can be taken into account in this link.
The final link measure how much the price level in the current month has changed from the average price level two years ago with weights based on the consumptions volumes two years ago.
The index number with base year 1980 is calculated by chaining the different annual links and multiply with the final link for current month.
The major sources of error in the CPI are lack of coverage, sample error, error of adjustment for quality difference by product replacements and deficiency in the data from which the weights are being computed. The most important lack of coverage concerns the consumption of kindergarten services and elderly care which, at present, are not included in the CPI. Calculations indicate that the sample error for total the CPI is about 0.4 percentage points for a year link, expressed as a 95 % interval of confidence.
Harmonized Index of Consumer Prices:
2015is the base year and the index is calculated starting in 1996.
Certain entries that are currently treated particularly differently in the calculation of national CPIs have been excluded. One particular difference compared with the CPI is that interest costs for owner-occupied homes are not included in the HICP. In addition, certain costs of owner-occupied homes (repairs, real-estate taxes, write-offs, insurance and ground rents), fees for tenant-owned flats, as well as lotteries, pools and tote betting are excluded. Some entries are included in the HICP but not in the CPI. These include childcare, elder care, hospital care and certain financial services (services where the fee is proportional to the size of the transaction).
HICP is based on a completely harmonized product classification, COICOP (Classification Of Individual Consumption by Purpose). Harmonized rules for coverage, consideration of new products, updating the product sample, adjustments for changes in quality, and index formulas for the calculations are also used in calculating the HICP.
The methods for calculating the index numbers and price changes for the HICP differ to a certain extent from the CPI. Similar to the CPI, the HICP is a chained index with yearly links, but with links going over December instead of going over year.
The HICP is not a replacement for the CPI. The CPI continues to be the official measure of changes in consumer prices in Sweden.
In CPIX the domain of CPI is modified to exclude interest costs for owner-occupied dwellings. The recorded prices are also adjusted for changes in indirect taxes and subsidies. This means that changes in the net total alterations in indirect taxes and subsidies, except those that are related to wages, are excluded from price movements. Apart from this some other calculating methods should be mentioned:
Starting with July 2008 Statistics Sweden also calculates the measure called CPIF. The aim here is to remove the effects of interest rate changes in the CPI. The index measuring interest cost in CPI is composed of two parts: one index for interest rates and one with an index for house prices. The definition of house prices in this case is the capital spent by households, on owner-occupied houses, at the time of purchase. In CPIF the effect of changed interest rates are removed, while the effect of changed house prices remains. This means that CPIF differs from CPIX, where the whole index for interest cost are removed (and also the effects of changes in indirect taxes and subsidies).
Subject to base year changes and slight revisions