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China PPI, CPI Chart for 1/2007 - 1/2010

sharon sanders

Editor-in-Chief & President
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2007年1月-2010年1月CPI与PPI走势​
January 2007 -2.01 thousand years, the trend in January CPI and PPI


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Re: China PPI, CPI Chart for 1/2007 - 1/2010

Is there a short answer to the question
'What is the significance of the change in the gap between CPI and PPI?' and as a supplemental 'are the two calculated in exactly the same way globally?'
 
Re: China PPI, CPI Chart for 1/2007 - 1/2010

They are not calculated the same globally because there is a variance in the selection of what to include in the indexes. Therefore, it is a general measure only.

The signficance of the increasing gap between CPI and PPI in this case is the that a large increase in PPI - which reflects higher costs of production i.e. labor in this case, is predictive of an increase in CPI unless there are some technological advances that keep producer prices low.

In any event, 1 month's data is not a trend as far as the gap goes. :)

However, the huge increase in the PPI for the last several months will drive prices higher without some huge increase in productivity to offset.
 
Re: China PPI, CPI Chart for 1/2007 - 1/2010

What was behind my original question was a vague memory that the PPI included imports and the CPI did not. I wondered if an increase in confidence - on the part of the manufactures - may have fueled a spike in manufactures stock holdings of raw materials and fuel (imported) and so the closing gap could be a proxy for producer confidence. I looked at the BDI rates - which would spike sharply if China ramped up coal / iron ore imports - and it has made a jittery but discernible improvement over the abyss of this time last year.
 
Re: China PPI, CPI Chart for 1/2007 - 1/2010

I do not know if manufacturers stocked up on raw materials. The chart indicates a steep increase in PPI for several months since July 2009 which indicates a systemic increase vs. speculative buying.
 
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