CN: Consumer Price Index

Fri Sep 08 20:30:00 CDT 2017

Consensus Actual Previous
Y/Y % Change 1.7% 1.8% 1.4%
M/M % Change 0.4% 0.1%

China's headline consumer price index increased by 1.8 percent on the year in August, up from 1.4 percent in July and above the consensus forecast of 1.7 percent. The index rose 0.4 percent on the month after an increase of 0.1 percent in July.

Stronger headline inflation in August was driven by both food and non-food prices. Food prices fell by 0.2 percent on the year in August, up from a decline of 1.1 percent in July, while the year-on-year change in non-food prices increased from 2.0 percent to 2.3 percent.

In year-to-date terms, the CPI is up 1.5 percent on the year to August, compared with an increase of 2.0 percent in the equivalent period last year.

Chinese Premier Li Keqiang announced in March at the annual National People's Congress that officials would retain an inflation target of "around 3.0 percent" for 2017. Despite weakness in food prices, headline inflation has been trending higher over the last six months and is now at its highest level since January.

Consumer Price Index (CPI) is an index that measures changes over time in the price level of consumer goods and services purchased by residents, which reflects the overall changes in price level.

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.