|Y/Y % Change||1.3%||1.4%||1.4%|
|M/M % Change||-0.5%||1.2%|
Subdued demand and falling oil prices continue to pull Chinese inflation well below Beijing's target. The reading was well below Beijing's target of "around 3 percent" this year, though it is slightly up from January's five-year low of 0.8 percent. Consumer prices were up 1.4 percent for a second month in March when compared with a year ago. However, the CPI dropped 0.5 percent on the month after increasing 1.2 percent in February and 0.3 percent in January. For the year to date, the CPI was up 1.2 percent. The urban CPI eased to an increase of 1.4 percent on the year from 1.5 percent the month before. Rural consumer prices were up 1.2 percent for a second month.
Among the subcategories, food prices were little changed from February, increasing 2.3 percent and 2.2 percent while nonfood prices were up 0.9 percent in March. Transportation & communication prices dropped 1.5 percent after sinking 1.7 percent the month before while tobacco & alcohol prices declined 0.5 percent after 0.6 percent in February.
The consumer price index measures the change in the price of goods and services purchased by consumers. The average price of various goods and services are sampled and then compared to the sampling a done year earlier.
Consumer prices account for a majority of overall inflation, which is carefully monitored by investors worldwide. Investors worldwide monitor Chinese price changes closely. A pickup in inflation could mean an increase in interest rates is in the offing from the People's Bank of China while an easing could mean looser monetary policy. The monthly CPI is broken down by 8 categories with more detail available on the following day including aggregate information by urban and rural areas and provinces.
The CPI measures the change in the level of prices for a specified basket of goods and services normally purchased by urban and rural residents. Approximately 226 areas throughout the country are covered, including 80 counties and 146 cities. The current CPI is an annually chained Laspeyres price index and has been available since 2001. From 1978 to 2000, the index was compiled using current year weights for most items.
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