November CPI rose 0.7% year-on-year, the highest increase since March 2024

On December 10th, the National Bureau of Statistics released the price operation data for November. In November, household consumption continued to recover, with the Consumer Price Index (CPI) rising by 0.7% year-on-year, an increase of 0.5 percentage points from the previous month, the highest since March 2024. The core CPI, which excludes food and energy prices, rose by 1.2% year-on-year. Affected by factors such as the optimization of supply and demand structure in some domestic industries and the transmission of international commodity prices, the Producer Price Index (PPI) for industrial producers increased by 0.1% month on month, marking two consecutive months of month on month growth and a year-on-year decrease of 2.2%.

The year-on-year increase in CPI has expanded, mainly driven by the shift in food prices from a decrease to an increase. Food prices have shifted from a decrease of 2.9% last month to an increase of 0.2%, and the impact on CPI year-on-year has shifted from a decrease of 0.54 percentage points last month to an increase of 0.04 percentage points. Energy prices decreased by 3.4%, an increase of 1.0 percentage point from the previous month, with gasoline prices dropping by 7.5%. The core CPI, which excludes food and energy prices, increased by 1.2% year-on-year, maintaining a growth rate of over 1% for three consecutive months. The prices of industrial consumer goods with services and energy deducted increased by 0.7% and 2.1% respectively, affecting the year-on-year increase of CPI by about 0.29 percentage points and 0.53 percentage points, respectively.

The main characteristic of the month on month operation of PPI in November is that the seasonal increase in demand in some domestic industries has driven up their prices. Starting from the peak winter season in various regions, the demand for coal and gas has increased seasonally. The prices of coal mining and washing industry have risen by 4.1% month on month, coal processing prices have risen by 3.4%, and gas production and supply industry prices have risen by 0.7%. The second factor is the differentiation of price trends in domestic non-ferrous metal and petroleum related industries due to input factors.

The PPI in November decreased by 2.2% year-on-year, an increase of 0.1 percentage points compared to the previous month, mainly due to the impact of the higher comparison base in the same period last year. The comprehensive rectification of "internal competition" has shown results, and the year-on-year price decline in related industries has narrowed.