| Actual | Previous | Consensus | Consensus Range | |
|---|---|---|---|---|
| Month over Month | -0.2% | 0.1% | ||
| Year over Year | -0.1% | -0.1% | -0.2% | -0.2% to -0.1% |
Highlights
China's headline consumer price index fell 0.1 percent on the year in May, as it did in April, and fell 0.2 percent on the month after a previous increase of 0.1 percent. Producer price inflation data also published today showed ongoing weakness in price pressures.
Weakness in headline CPI inflation was largely driven by energy prices, down 6.1 percent on the year. Core CPI, however, rose 0.6 percent on the year, boosted by solid price increases for durable goods, services, and accommodation.
Today's data were close to the consensus forecast for a year-over-year decline of 0.2 percent. The China RPI and RPI-P fell from minus 29 to minus 43 and from minus 33 to minus 60 respectively, indicating that recent Chinese data in sum are coming in further below consensus forecasts.
Weakness in headline CPI inflation was largely driven by energy prices, down 6.1 percent on the year. Core CPI, however, rose 0.6 percent on the year, boosted by solid price increases for durable goods, services, and accommodation.
Today's data were close to the consensus forecast for a year-over-year decline of 0.2 percent. The China RPI and RPI-P fell from minus 29 to minus 43 and from minus 33 to minus 60 respectively, indicating that recent Chinese data in sum are coming in further below consensus forecasts.
Market Consensus Before Announcement
The consensus looks for CPI falling back further to show a decline of 0.2 percent on year in May after a 0.1 percent decrease in April.
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.
