CPI year-on-year increase, highest in three years, PPI decline continues to narrow - perspective on February price data

According to data released by the National Bureau of Statistics on the 9th, in February, the consumer price index (CPI) of Chinese residents rose by 1.0% month on month, the highest value since March 2024; Year on year increase of 1.3%, the highest value since February 2023. The Producer Price Index (PPI) for industrial producers decreased by 0.9% year-on-year, narrowing the decline by 0.5 percentage points compared to the previous month, marking the third consecutive month of narrowing decline.

Experts say that the CPI increase has returned to "1%" mainly due to the combination of Spring Festival factors and the recovery of consumer demand.

Let's first look at the month on month comparison——

Dong Lijuan, Chief Statistician of the Urban Department of the National Bureau of Statistics, analyzed that the month on month increase in CPI has expanded from 0.2% last month to 1.0%, mainly due to the concentrated release of consumer demand during the longer Spring Festival holiday, resulting in a significant increase in service prices, which is higher than the seasonal level.

The service price increased by 1.1% month on month, with an increase of 0.9 percentage points compared to the previous month, affecting the CPI to rise by about 0.54 percentage points month on month. ”Dong Lijuan said that in terms of services, airfare, transportation rental, travel agency fees, and hotel accommodation prices have increased by 31.1%, 24.7%, 15.8%, and 7.3% respectively. The total impact of these four factors on the month on month increase in CPI is about 0.32 percentage points, accounting for over 30% of the total CPI increase.

In addition, industrial consumer goods prices rose by 0.4%, an increase of 0.1 percentage points from the previous month. Among them, due to the upward trend of international gold prices, domestic gold jewelry prices rose by 6.2%, and the transmission effect of international geopolitical conflicts on energy prices became apparent. Domestic gasoline prices rose by 3.1%, and the combined impact of the two factors led to a month on month increase of about 0.12 percentage points in CPI.

Looking at the year-on-year comparison again——

Data shows that the year-on-year increase in CPI has expanded from 0.2% last month to 1.3%. Among them, service prices have risen by 1.6%, an increase of 1.5 percentage points compared to the previous month, affecting the year-on-year increase in CPI by about 0.75 percentage points; Food prices have shifted from a 0.7% decrease last month to a 1.7% increase, affecting a year-on-year increase of approximately 0.30 percentage points in CPI.

The year-on-year increase in CPI is the highest in three years, partly due to the impact of the 'lower base' caused by the wrong month of the Spring Festival. January of last year was the Spring Festival month, while this year's Spring Festival is in February, and the Spring Festival holiday is longer this year, which continues to release demand for service consumption; On the other hand, the expansion of CPI growth also reflects the sustained recovery and improvement of domestic consumer demand supported by various policy measures. ”Liu Fang, a researcher at the Market and Price Research Institute of the National Development and Reform Commission, said.

PPI, which has a leading indicator significance, continues to show positive changes.

In February, PPI decreased by 0.9% year-on-year, narrowing the decline by 0.5 percentage points compared to the previous month, and narrowing the decline for three consecutive months; The month on month increase is 0.4%, marking the fifth consecutive month of growth.

On the one hand, the rise in international non-ferrous metal and crude oil prices has driven up prices in related domestic industries; on the other hand, the growth in computing power has driven up demand in some industries, resulting in a 0.6% month on month increase in prices in the computer communication and other electronic equipment manufacturing industry, "said Dong Lijuan.

The continuous manifestation of the integrated effect of domestic macro policies has also driven positive changes in prices in some industries.

With the accelerated construction of the modern industrial system, prices in related industries have increased year-on-year. The booming development of "artificial intelligence+" has driven up the manufacturing prices of electronic components and electronic specialized materials by 4.9%, and the manufacturing prices of service consumer robots by 0.7%; The continuous promotion of green transformation has driven up the price of biomass fuel processing by 3.2%; The strong growth of high-end equipment has led to a 7.7% increase in aircraft manufacturing prices and a 0.5% increase in ship and related equipment manufacturing prices.

The comprehensive rectification of production capacity governance and "internal competition" in key industries continues to show results, and the manufacturing prices of photovoltaic equipment and components have increased by 3.2% year-on-year, an increase of 2.7 percentage points compared to the previous month; The manufacturing price of lithium-ion batteries has increased by 0.2% from a decrease of 1.1% last month, marking the first increase after a 33 month consecutive year-on-year decline.

With more proactive and effective macro policies continuing to take effect, promoting the improvement of residents' employment and income expectations, the potential for domestic demand is expected to be further released, providing support for prices in related industries, "said Liu Fang.