China’s consumer prices rose by 1.5 percent year-on-year in January of 2018, after a 1.8 percent rise in the prior month and matching market consensus. It was the lowest inflation rate since July 2017, due to a slowdown in the cost of non-food and a further fall in the cost of food.
Politically sensitive food prices declined by 0.5 percent (from -0.4 percent in the prior month) in January, while non-food cost rose at a softer rate of 2.0 percent (from 2.4 percent). Cost of consumer goods went up 1.0 percent (from 1.1 percent) and those of services increased by 2.3 percent (from 3.0 percent).
Among food, prices dropped for pork (-10.6 percent from -8.3 percent) and fresh vegetables (-5.8 percent from -8.6 percent). In contrast, prices rose for: eggs (14.2 percent from 11.4 percent); milk (0.9 percent from 0.6 percent), fresh fruits (6.4 percent from 6.3 percent) and tobacco (0.1 percent from a flat reading in December 2017).
For non-food, prices increased at a slower pace for most categories: rent, fuel & utilities (2.7 percent from 2.8 percent); household goods and services (1.5 percent from 1.6 percent); transport and communication (0.2 percent from 1.2 percent); education, culture & recreation (0.9 percent from 2.1 percent); healthcare (6.2 percent from 6.6 percent) and other goods and services (1.2 percent from 1.9 percent).
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Meantime, the cost went up more only for clothing (1.4 percent from 1.3 percent).
On a monthly basis, consumer prices increased by 0.6 percent, following a 0.3 percent gain in the preceding month and slightly above estimates of a 0.7 percent rise. It was the highest monthly figure in a year.
The producer price index increased by 4.3 percent from a year earlier in January 2018, compared to a 4.9 percent rise in the prior month, while markets estimated a 4.4 percent gain. It was the 17th straight month of rise in producer prices but the least since November 2016.
The cost rose less for means of production (5.7 percent from 6.4 percent in December, namely extraction: 6.8 percent, raw materials: 7.3 percent and processing: 4.9 percent). Also, prices rose at a softer pace for consumer goods (0.3 percent from 0.5 percent, namely daily use goods: 1.4 percent; clothing: 0.8 percent, while food production was flat. At the same time, prices of consumer durable goods declined at a faster 0.3 percent (from -0.2 percent in the prior month). On a monthly basis, producer prices rose 0.3 percent, following a 0.8 percent gain in December 2017.
