CN: Consumer Price Index

Fri Dec 08 19:30:00 CST 2017

Consensus Actual Previous
Y/Y % Change 1.8% 1.7% 1.9%
M/M % Change 0.0% 0.1%

China's headline consumer price index increased by 1.7 percent on the year in November, easing from 1.9 percent in October and just below the consensus forecast of 1.8 percent. The index was flat on the month in November after an increase of 0.1 percent in October.

The drop in headline inflation in November was driven by a sharper fall in food prices, which declined by 1.1 percent on the year after declining by 0.4 percent in October. The year-on-year increase in non-food prices, meanwhile, increased from 2.4 percent to 2.5 percent. Within the non-food category, price gains were stronger for transportation and communication and unchanged for housing, clothing, and household articles and services.

Urban inflation eased from 1.9 percent in October to 1.8 percent in November, while rural inflation fell from 1.7 percent to 1.5 percent. In year-to-date terms, the CPI is up 1.5 percent on the year to November, unchanged from the year-to-date increase recorded in each of the three previous months.

Chinese Premier Li Keqiang announced early in the year officials would retain an inflation target of "around 3.0 percent" for 2017. Although non-food price inflation has picked up in recent months, persistent weakness in food prices looks set to ensure that annual headline inflation will fall short of this target.

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.