| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | -0.1% | -0.3% | ||
| Year over Year | 0.8% | 0.8% to 0.9% | 0.5% | 1.0% |
Highlights
China's headline consumer price index rose 0.5 percent on the year in July, moderating from an increase of 1.0 percent in June, and fell 0.1 percent on the month after a previous fall of 0.3 percent. Food prices fell 1.5 percent on the year after a previous decline of 1.6 percent, while non-food inflation slowed from 1.5 percent to 0.9 percent, largely reflecting a much smaller increase in transport costs. Core inflation, excluding food and energy, eased from 1.0 percent to 0.9 percent.
Market Consensus Before Announcement
CPI inflation expected to fade to an increase of 0.8 percent on year in July from 1.0 percent in June, suggesting lack of economic impetus and excess supply.
Definition
The 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.