| Actual | Previous | Consensus | |
|---|---|---|---|
| Month over Month | 0.5% | -0.2% | |
| Year over Year | 0.5% | 0.2% | 0.3% |
Highlights
China's headline consumer price index rose 0.5 percent on the year in July, picking up from the 0.2 increase recorded in June. The index also rose 0.5 percent on the month after falling 0.2 percent previously. Producer price inflation data also published today showed ongoing weakness in price pressures.
Food prices were flat on the month after falling previously, while non-food prices rose 0.7 percent after increasing 0.8 percent previously. Core inflation moderated from 0.6 percent in June to 0.4 percent in July.
Today's data were stronger than the consensus forecast for a year-over-year increase of 0.3 percent in the CPI. The China RPI and RPI-P rose from minus 29 to minus 14 and fell from minus 29 to minus 40 respectively, indicating that recent Chinese data in sum are still coming in below consensus forecasts.
Food prices were flat on the month after falling previously, while non-food prices rose 0.7 percent after increasing 0.8 percent previously. Core inflation moderated from 0.6 percent in June to 0.4 percent in July.
Today's data were stronger than the consensus forecast for a year-over-year increase of 0.3 percent in the CPI. The China RPI and RPI-P rose from minus 29 to minus 14 and fell from minus 29 to minus 40 respectively, indicating that recent Chinese data in sum are still coming in below consensus forecasts.
Market Consensus Before Announcement
China's consumer inflation annual rate is forecast to remain tame at 0.3 percent in July after a 0.2 percent rise in June, which was the fifth straight year-over-year increase following four months of decline.
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.
