| Actual | Previous | Consensus | |
|---|---|---|---|
| Month over Month | 0.3% | 0.2% | |
| Year over Year | 0.1% | -0.3% | 0.0% |
Highlights
China's headline consumer price index rose 0.1 percent on the year in August after falling 0.3 percent in July. The index advanced 0.3 percent on the month after an increase of 0.2 percent previously. Food prices fell 1.7 percent on the year after a fall of 1.0 percent previously, while the year-over-year increase in non-food items was unchanged at 0.5 percent.
Today's inflation data provide further evidence that economic conditions remain subdued, broadly in line with previously published PMI surveys and offical activity data. This continued weakness may strengthen the case for some measures to support stronger demand.
The increase in headline CPI inflation to 0.1 percent was just above the consensus forecast for no change. The China ECDI and the ECDI-P rose from minus 36 to plus 7 and minus 10 respectively, indicating that recent Chinese data in sum are coming in close to consensus forecasts.
Today's inflation data provide further evidence that economic conditions remain subdued, broadly in line with previously published PMI surveys and offical activity data. This continued weakness may strengthen the case for some measures to support stronger demand.
The increase in headline CPI inflation to 0.1 percent was just above the consensus forecast for no change. The China ECDI and the ECDI-P rose from minus 36 to plus 7 and minus 10 respectively, indicating that recent Chinese data in sum are coming in close to consensus forecasts.
Market Consensus Before Announcement
After July's minus 0.3 percent year-over-year rate, August is expected to come in unchanged. China's CPI has fallen steadily from January's 2.1 percent.
Definition
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.
Description
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.
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.
