In terms of non-food, the decline in international oil prices and the repeated domestic epidemics have caused non-food prices to fall by 0.2 percentage points, which are the main reasons for the decline in CPI growth this month.

Oil prices fell and weak demand caused inflation to be lower than expected

August 2022 CPI and PPI data comments

Core views

In terms of food, the upward trend of pig prices and the increase in fresh vegetables was lower than the same period in history, which together led to the year-on-year pull of CPI by food. Slightly fell. In terms of non-food, the decline in international oil prices and the repeated domestic epidemics have caused non-food prices to fall by 0.2 percentage points, which is the main reason for the decline in the growth rate of CPI this month. At the same time, the core CPI remained flat last month, continuing its weakness, due to weak service and consumer demand.

2. CPI is expected to grow by about 3.0% in September. Looking back, the pork upward cycle begins, service demand recovery, and upstream and downstream price transmission will all provide upward support to the CPI center. It is expected that the year-on-year growth rate of CPI in September will break "3", but the epidemic disturbance and weak demand restrict the upward trend Space, the CPI grew by about 2.3% throughout the year, and it was moderate overall.

3. High base, oil prices fell, and domestic demand was weak, which led to a sharp decline in PPI. was affected by the decline in and the downward price of commodities such as crude oil and coal. In August, PPI fell by 1.9 percentage points year-on-year to 2.3%. By industry, the month-on-month decline in the crude oil chain industry has expanded, indicating that the pressure of imported inflation continues to weaken; the price decline in nonferrous metals and ferrous metal calendering industries has narrowed, which may be driven by the release of infrastructure demand; the prices of mid- and downstream industries have fluctuated around zero month-on-month, indicating that the domestic Demand recovery is weak.

4. It is expected that the PPI will continue to fall rapidly this year, with an increase of about 0.6% in September. 's tail factor continued to decline rapidly in the second half of the year. Coupled with the impact of global economic slowdown and decline in demand, the pressure of imported inflation will significantly slow down, and PPI will continue to fall rapidly this year. However, due to the continued geopolitical conflict, there is still great uncertainty in the supply constraints faced by international commodities, which will affect the downward slope of PPI. It is expected that the center of the whole year will be around 4.1%.

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Event: In August 2022, the national consumer price index (CPI) fell 0.1% month-on-month, up 2.5% year-on-year, down 0.2 percentage points from the previous month; industrial producer price index (PPI) fell 1.2 month-on-month %, up 2.3% year-on-year, down 1.9 percentage points from the previous month.

1. Non-food food is the main reason for the year-on-year decline in CPI. It is expected that CPI will grow by about 3.0% in September

The upward slowdown in pig prices has led to a year-on-year increase in food. htmlFood prices in 28 narrowed by 2.5 percentage points to 0.5%, and year-on-year growth narrowed by 0.2 percentage points to 6.1%, affecting the CPI rise by about 1.09 percentage points, a slight decline of 0.03 percentage points from the previous month (see Figure 1). Among them, due to factors such as the easing of pig pen pressure and the weakening of seasonal demand, the month-on-month increase in pork prices fell by 25.2 percentage points to 0.4%. In addition, the base was relatively low in the same period last year, and the year-on-year increase in pork increased by 2.2 percentage points to 22.4%, which is for CPI The year-on-year pulling effect increased by 0.03 percentage points compared with the previous month; due to the impact of the high-temperature and drought weather on the market in northern vegetables, the month-on-month increase in fresh vegetables fell by 8.3 percentage points to 2.0%, which was also lower than the average of the same period from 2008 to 2021 by 4.5 percentage points, which was affected by the This impact, its year-on-year pulling effect on CPI fell by 0.12 percentage points compared with the previous month; other major foods rose and fell by the same month, and the total year-on-year pulling effect on CPI by 0.08 percentage points compared with the previous month (see Figure 2 -3).

Oil prices fell and repeated epidemics caused a decline in non-food prices. html Non-food prices rose 1.7% year-on-year in 28, down 0.2 percentage points from the previous month (see Figure 4). The pulling effect on CPI fell by 0.18 percentage points year-on-year, which is the main reason for the year-on-year decline in CPI. The prices of non-food prices show the following characteristics: First, affected by the decline in international oil prices, the prices of fuel for transportation in August rose by 19.9% ​​year-on-year, down 4.3 percentage points from the previous month, and the role of pushing non-food prices has been significantly weakened; Due to the repeated impact of the domestic epidemic, the prices of tourism and other related services have fallen, but summer consumption has led to the rebound of prices of other supplies and services, and the overall contribution of service consumption to non-foods is relatively stable; third, due to the weak domestic demand and the rapid downward trend of PPI, Prices of industrial products such as household appliances have fallen.

Due to the repeated impact of the epidemic, the core CPI continues to be weak.The core CPI of html, which excluded food and crude oil in 28, increased by 0.8% year-on-year, remained the same as last month (see Figure 5). The main reason is that the domestic epidemic has repeated, resulting in the continued slow recovery of the service industry. Looking back, it is expected that the service industry will be moderately restored in the future. In addition, policies to protect employment, people's livelihood and promote consumption are expected to be further strengthened. The core CPI rebound is expected, but the disturbance of the epidemic and the slow recovery of low-income groups will restrict its recovery.

CPI is expected to increase by about 3.0% year-on-year in September. First, it is expected that the month-on-month increase in food prices will expand in September. According to data from the Ministry of Agriculture, as of September 8, the prices of 28 key monitoring vegetables, 7 key monitoring fruits and pork were 15.8%, -1.1%, and 4.1%, respectively, and the prices of vegetables and pork were month-on-month. The prices of vegetables and pork were month-on-month. Both have increased significantly, and the decline in fruits has narrowed, so it is expected that the month-on-month increase in food in September will expand. Second, a new round of pig cycle has begun, and the base was low in the same period last September, and it is expected that the year-on-year pulling effect of pork on CPI will rebound; Third, the service industry's recovery and price transmission role will be enhanced, which will provide upward support for non-food prices. , but the epidemic disturbance and weak demand restrict the recovery; Fourth, the CPI tail factor in September was basically the same as in August (see Figure 6).

2. High base, oil prices fell, and domestic demand was weak, which led to a sharp decline in PPI. It is expected that PPI will grow by about 0.6% in September

is subject to downward volatility in international commodities such as high base, crude oil, and weak domestic real estate and consumption demand in September. Due to the combined influence of other factors, the industrial producer price (PPI) fell by 1.9 percentage points year-on-year to 2.3%. Among them, means of production and means of living increased by 2.4% and 1.6% year-on-year, down 2.6 and 0.1 percentage points from the previous month. The prices of means of production fell a lot, and means of living were basically stable (see Figure 7). Judging from the sub-item of daily necessities, the price increase of food, clothing and general daily necessities is basically the same as last month, while the decline in the price of durable consumer goods has deepened, indicating that residents' consumption recovery is slow and essential consumer goods lacks upward support (see Figure 8).

From the industry perspective, the pressure of imported inflation tends to weaken, and the prices of infrastructure-related industrial products have stabilized. First, due to the large decline in crude oil prices and the stable domestic coal supply and price, the price decline in crude oil and coal chain industries has expanded month-on-month. For example, this month, the PPI of oil and natural gas mining, petroleum and coal fuel processing, coal mining and other industries increased month-on-month. The largest drop in speed (see Figure 9); secondly, due to the release of domestic infrastructure investment demand, the price decline in non-ferrous metal smelting and rolling processing industry, non-ferrous metal mining and dressing industry, ferrous metal smelting and rolling processing industry have all seen significant month-on-month declines in prices. Narrowing; third, due to the slow recovery of domestic real estate and consumer demand, the PPI growth rate of mid- and downstream industries has not fluctuated significantly on the month-on-month, both fluctuating up and down around 0%.

is expected to grow by about 0.6% in September. First, the PPI tail factor in September fell by about 1.1 percentage points from the previous month (see Figure 10); second, the infrastructure efforts and the expected recovery of real estate will provide certain support for domestic pricing commodities, but the policy of ensuring supply and stabilizing prices will continue to be promoted. The month-on-month increase in prices of industrial products such as coal and midstream and downstream is relatively controllable; third, the global economic slowdown is a foregone conclusion, demand has declined, the momentum of rising commodity prices has weakened, and the purchase price of major raw materials is expected to continue to decline; fourth, geopolitical conflicts continue The supply constraints faced by international commodities are difficult to say, and the imported pressure will generally ease during the year, but there is also great uncertainty.

. PPI and CPI scissor gap turns from positive to negative. In the future, the profit structure of upstream, midstream and downstream is expected to improve

PPI and CPI scissor gap reflects the changes in the profit space of industrial enterprises to a certain extent. The widening of the gap between PPI and CPI scissors usually means the continuous recovery of corporate profits and economic momentum (see Figure 11-12). However, this round of widening of the PPI and CPI scissors gap is mainly driven by the price increase of upstream raw materials, with significant structural characteristics and not a comprehensive price increase. As domestic demand recovers to a weaker recovery, the ability of mid- and downstream industries to transfer costs is still weak, resulting in a strong squeezing effect on mid- and downstream profits, which in turn suppresses the willingness of mid- and downstream companies to invest in to expand production, which is not conducive to the domestic economy Recovery of kinetic energy.

8 August's scissors gap between PPI and CPI changed from 1.5% last month to -0.2%, which changed from positive to negative for the first time since 2021. The scissors gap between the two means that the profit growth rate of industrial enterprises will slow down marginally in the future, but the upper middle The lower structure is expected to improve marginally.

This article comes from the financial world