Hot China Inflation Nov 2009-2010: Consumer Prices +5.1%, Producer Prices +6.1%

Consumer inflation in China increased 5.1% from November 2009 to November 2010, and business inflation increased 6.1% for the same period. Food prices were a major inflationary factor, increasing 11.7%. Below are excerpts on consumer and business inflation from China’s full report, which some say is of questionable credibility. Still, this may cause China to hike rates to cool inflation, or at least provide more rationale for bond markets to continue selling off this weekend—which would cause rates to continue higher.

The consumer prices continued to rise: In November, the consumer price index went up by 5.1 percent year-on-year. The price grew by 4.9 percent in cities and 5.6 percent in rural areas. The food price went up by 11.7 percent while the non-food price increased by 1.9 percent. The prices of consumer goods went up by 5.9 percent and the prices of services grew up by 2.6 percent. Grouped by commodity categories, in November, of the eight categories of commodities, six of them experienced prices rise and two witnessed prices decline. Of which, prices for food went up by 11.7 percent; prices for tobacco, liquor and articles rose by 1.6 percent; price for clothing went down by 0.7 percent; prices for household facilities, articles and maintenance services went up by 0.7 percent; health care and personal articles rose by 4.0 percent; transportation and communication went down by 0.7 percent; recreation, education, culture articles and services grew by 0.6 percent, and housing went up by 5.8 percent. In the first eleven months, the year-on-year change of consumer price was up by 3.2 percent, or expanded by 0.2 percentage point as compared with that in the first ten months of this year.

In November this year, the month-on-month change of consumer price was up by 1.1 percent. Of which, price in cities went up by 1.0 percent and that in rural areas went up by 1.3 percent. The food price rose by 2.0 percent and the non-food price increased by 0.6 percent. The price of consumer goods grew by 1.5 percent, and the price of services went down by 0.2 percent. Grouped by commodity categories, in November, prices for food rose by 2.0 percent month-on-month, of which the price for fresh vegetables decreased by 1.9 percent; prices for tobacco, liquor and articles increased by 0.2 percent, price for clothing went up by 1.6 percent, prices for household facilities, articles and maintenance services increased by 0.4 percent, health care and personal articles grew by 0.7 percent; transportation and communication maintained the same level, recreation, education, culture articles and services dropped by 1.0 percent, and housing went up by 1.8 percent.

The producer prices for manufactured goods kept growing:In November, the producer prices for manufactured goods went up by 6.1 percent year-on-year. The producer prices for means of production went up by 6.9 percent year-on-year in November, of which that for mining and quarrying industry grew by 14.6 percent, raw materials industry went up by 9.8 percent and processing industry increased by 4.7 percent. The producer prices for means of livelihood increased by 3.3 percent, of which, the food prices grew by 6.2 percent, clothing went up by 2.7 percent, articles for daily use grew by 3.1 percent and durable consumer goods dropped by 0.7 percent. In November, the month-on-month change of the producer prices for manufactured good went up by 1.4 percent. In the first eleven months of this year, the year-on-year change of the producer price for manufactured good was up by 5.5 percent, maintaining the same level as that in the first ten months of this year.

In November, the purchasing prices for raw materials, fuel and power went up by 9.7 percent year-on-year. The year-on-year change of prices for nonferrous metals and wire went up by 16.5 percent, fuel and power rose by 9.8 percent, 9.8 percent growth for raw chemical materials and 10.7 percent increase for ferrous metals. In the first eleven months, the purchasing prices for raw materials, fuel and power grew by 9.6 percent year-on-year, maintaining the same level as that in the first ten months of this year.