| Actual | Previous | Consensus | Consensus Range | |
|---|---|---|---|---|
| Month over Month | 0.4% | 0.5% | ||
| Year over Year | 0.6% | 0.5% | 0.7% | 0.7% to 0.8% |
Highlights
China's headline consumer price index rose 0.6 percent on the year in August, picking up from the 0.5 increase recorded in July. The index rose 0.4 percent on the month after advancing 0.5 percent previously. Producer price inflation data also published today showed ongoing weakness in price pressures.
The increase in CPI inflation in August was driven by prices for clothing, services and other items, offset by weakness in food and fuel prices. Core inflation moderated from 0.4 percent in July to 0.3 percent in August.
Today's data were just below the consensus forecast for a year-over-year increase of 0.7 percent in the CPI. The China RPI and RPI-P fell from minus 29 to minus 36 and rose from minus 42 to minus 30 respectively, indicating that recent Chinese data in sum are still coming in well below consensus forecasts.
The increase in CPI inflation in August was driven by prices for clothing, services and other items, offset by weakness in food and fuel prices. Core inflation moderated from 0.4 percent in July to 0.3 percent in August.
Today's data were just below the consensus forecast for a year-over-year increase of 0.7 percent in the CPI. The China RPI and RPI-P fell from minus 29 to minus 36 and rose from minus 42 to minus 30 respectively, indicating that recent Chinese data in sum are still coming in well below consensus forecasts.
Market Consensus Before Announcement
August's year-over-year rate is expected to see an increase to 0.7 percent versus July's 0.5 percent rate that compared with expectations for 0.3 percent. China's CPI has been depressed, last peaking in January last year at 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.
