CN: Consumer Price Index

Wed May 09 20:30:00 CDT 2018

Consensus Actual Previous
Y/Y % Change 1.9% 1.8% 2.1%
M/M % Change -0.2% -1.1%

China's headline consumer price index increased by 1.8 percent on the year in April, slowing from 2.1 percent in March and just below the consensus forecast of 1.9 percent. This is the second consecutive fall in headline CPI inflation after it spiked sharply higher in February. The index fell 0.2 percent on the month after dropping 1.1 percent previously.

As in March, food prices were the main factor driving the decline in headline inflation in April, increasing by 0.7 percent on the year after an increase of 2.1 percent previously. Non-food price inflation, in contrast, was unchanged at 2.1 percent, with a stronger increase in transport and communication charges offset by weaker increases elsewhere. Housing cost inflation was steady at 2.2 percent. Urban inflation fell from 2.1 percent in March to 1.8 percent in April, while rural inflation fell from 1.9 percent to 1.7 percent.

The Chinese government announced at annual meetings of the National People's Congress in March that it will target inflation at "around 3 percent" in 2018, as it did in 2017.

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.