| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 0.2% | -0.1% | ||
| Year over Year | 0.7% | 0.6% to 0.8% | 0.8% | 0.7% |
Highlights
China's headline consumer price index rose 0.8 percent on the year in December after advancing 0.7 percent in November, and rose 0.2 percent on the month after falling 0.1 percent previously. Inflation has been in positive territory for three consecutive months and is now at its highest level since early 2023. Producer price inflation data also published today showed ongoing weakness in price pressures.
The increase in headline CPI inflation was largely driven by a bigger increase in food prices, up 1.1 percent on the year after a previous increase of 0.2 percent. Core CPI inflation was unchanged at 1.2 percent.
Headline CPI inflation was just above the consensus forecast of 0.7 percent. The China RPI rose from minus 34 to minus 13 while the RPI-P was unchanged at minus 38, indicating that recent Chinese data in sum are below consensus forecasts.
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.