On October 14, the United States and China successively announced the CPI indicator for September, but the results were still very different. This also makes some people feel a little puzzled - as the two superpowers of the world's first and second largest economies, they are also facing the downward trend of global economy , why is there such a big gap in CPI data?
China and the United States also disclosed CPI. The data are very different.
CPI We all know that it is an indicator to measure the level of price increase. A country's CPI indicator is too high, which means that this country is facing the crisis of inflation .
If some products that are more affected by climate and seasonal factors (such as food and energy) are eliminated, the core CPI indicator can be obtained. core CPI is usually considered the best indicator to measure inflation.
According to data from the U.S. Department of Labor, the US CPI data in September rose 8.2% year-on-year, although it fell 0.1% from August, but it is still higher than the previous market expectations of 8.1%.
html In September, the US core CPI rose 6.6% year-on-year, setting a record high since August 1982. Compared with August, the increase in also reached 0.6%. Overall, the US CPI still has not changed much in the general direction and remains high.
Just after the United States announced the CPI indicators, China also released the September CPI data, but China's CPI index showed a completely different performance.
data shows that my country's CPI rose 2.8% year-on-year in September, an increase of 0.3 percentage points compared with the CPI increase in August, but it did not meet the previous market expectations of 3%.
's core CPI after deducting food and energy prices was even lower, up only 0.6% from the same period last year, which is still 0.2 percentage points lower than last month.
As we mentioned in the previous article, CPI is an important indicator for measuring inflation. I believe that through the above data, you can also find that the inflation situation in the United States is still higher than expected, and inflation stickiness is still strong; while China's inflation data performance is relatively stable, even lower than expected. What causes this difference?
The backlash after unlimited quantitative easing - high inflation
In fact, in 2019, the annual growth rate of the US CPI was only about 2%, similar to China. Who would have thought that today three years later, the CPI data of China and the United States would be on two completely different paths?
After the outbreak of the epidemic, the domestic economy of the United States suffered a huge impact. In 2020, the US GDP shrank by 3.4%, even exceeding the decline during the global economic crisis from 2008 to 2009.
As we all know, investment, consumption and export are the three pillars that drive the economy. In the current epidemic situation, it is very difficult to make a fuss about investment and exports. Therefore, the United States chose to start with consumption and drive economic recovery. How to do
? is very simple and crude. The United States chooses to directly pay the people. people get a huge sum of money for free, so why not "buy, buy, buy" quickly. In this way, will it stimulate consumption and drive the economy?
So giving money to the people is a considerable expense. Where does this money come from? This is easy to deal with. . The United States turns on the money printing machine - print money!
It is reported that from March 2020 to March 2021, the three rounds of rescue plans in the United States spent more than US$5 trillion, which has almost reached one-quarter of the United States' annual GDP in 2020. Under multiple rounds of rescue plans, the consumption level of residents in the United States has indeed significantly improved.
But is this method really a "splendid"? Is this behavior in the United States "rescue yourself" or "drinking poison to quench thirst"?
Obviously, this unlimited quantitative easing has brought "sequelae" to the United States after all. Under quantitative easing, residents' consumption demand is too strong, but the supply cannot be met, which directly pushes up the inflation rate.
plus the excessive currency issuance has led to the flood of liquidity in the US market, and the purchasing power of currency has dropped sharply. is miserable for the people. The money in their hands is "not delicious" at once, the price level is flying, and the living costs of residents have increased significantly. The pleasure of giving money back then is how sad it is now.
After this, although the United States has adopted interest rate hikes and other measures to try to lower the inflation rate, judging from the September data just released, it is obvious that this adjustment process is probably far longer than we imagined.
Can China's inflation level be lower?
In contrast, the Chinese market is completely opposite. After the epidemic, China immediately adopted strict epidemic prevention policies and achieved practical results. ensured that my country's supply side was not affected, the price level remained basically stable, and there was no inflation.
Although CPI increased by 2.8% year-on-year in September this year, it also includes commodities whose prices are more seasonal, such as pork with a large price increase recently, with prices up 36% year-on-year.
In response to this, the National Development and Reform Commission stated that the current price of live pigs is in an excessive increase range. But the reason is not because of pig shortage, but because some farmers are trying to compete for the future market.
If the price increase of pork products is excluded, then China's CPI is only 2.02% year-on-year. If we only look at the core CPI, the September data increased by only 0.6% year-on-year, which is also the lowest record since 2021. It can be seen that insufficient domestic demand is still a problem facing my country's economy.
In addition, in September this year, PPI, which represents the upstream inflation level, rose 0.9% year-on-year, a decrease of 1.4 percentage points from the previous value. The upstream profit margin expanded, and some institutional analysts predicted that the subsequent PPI will continue to decline.
In general, China does not need to worry about inflation now. On the contrary, CPI is currently showing a downward trend, and PPI may also face deflation. The upstream and downstream inflation pressures of are inverted. At this time, we should be more wary of deflation that may be caused by insufficient domestic demand.
is written at the end:
In fact, it can also be seen from some recent macro policies that our country is trying hard to regulate and stimulate the economy and avoid the economy from falling into tightening, such as lowering the reserve requirement ratio and interest rate cuts, and investing in infrastructure. I believe that through precise adjustment, our country's economy will maintain a steady and progressive pace, and the United States faces high inflation pressure, it is inevitable that it will continue to raise interest rates.
Reference:
. Guojun Macro Dong Qi "Guojun Macro: Domestic Inflation Pressure Relaxed in the Fourth Quarter"
. China Economic Network "U.S. CPI month-on-month increase in September exceeded expectations, year-on-year growth remains at a historical high"
