Affected by the double drop in meat and vegetable prices and the high base, CPI returned to the "1" range after 7 months. On December 9, the National Bureau of Statistics released data showing that the CPI rose by 1.6% year-on-year in November, in line with market expectations. Last month, the increase was 2.1%. The average year-on-year increase in CPI in November was 2%.
PPI fell by 1.3% year-on-year, the same rate of decline as last month, and fell for two consecutive months; affected by rising prices in industries such as coal, petroleum, non-ferrous metals, and , PPI rose slightly by 0.1% month-on-month, showing positive growth month-on-month for two consecutive months.
The double drop in the price of meat and vegetables is the main reason CPIThe trend of "Great Moderation" may continue
Dong Lijuan, chief statistician of the City Department of the National Bureau of Statistics, said when interpreting the data that in November, due to the domestic epidemic, seasonal factors and a higher base compared with the same period last year, etc. Under the joint influence, the CPI changed from a month-on-month increase to a decrease, and the year-on-year increase fell back.
In November, the CPI1z year-on-year growth rate fell sharply, which is related to the relatively high base in the same period last year. The CPI in November 2021 was 2.3% year-on-year, which is the highest value in 2021. According to the National Bureau of Statistics, among the 1.6% year-on-year increase in CPI in November, the carryover effect of last year's price changes was about -0.3 percentage points, and the impact of new price increases was about 1.9 percentage points. The core CPI excluding food and energy prices rose 0.6% year-on-year, the same increase as the previous month.
From a structural point of view, the accelerated decline in food prices is the main reason for the decline in CPI. Looking at the month-on-month comparison, the price of fresh vegetables dropped by 8.3%, an increase of 3.8 percentage points from the previous month, and the price of pork changed from rising to falling, falling by 0.7%. The
analysis pointed out that the weakening motivation of farmers to hold down the stalls has driven down the price of pigs, and the supply of fresh vegetables has continued to recover. Since November, the deferred supply of live pigs has been released, and the motivation of farmers to hold back the stalls has weakened. At the same time, the release of pork from the central reserve continued, the supply of live pigs continued to increase, and the price of pork changed from rising to falling.
In terms of vegetables, due to good weather conditions and sufficient supply, the market volume of vegetables has increased rapidly, and the month-on-month decline in the CPI of fresh vegetables has continued to expand, jointly ensuring that the food CPI inflation pressure is controllable.
Non-food CPI remained flat year-on-year at a low level. Shenwan Securities pointed out that OPEC+ production cuts triggered a rise in international oil prices, which was transmitted to a slight increase in the CPI of transportation fuels, but the CPI of other industrial products continued to fall by 0.1 percentage points to 0.6% year-on-year , which shows that coal supply and production increase to stabilize industrial product prices, as well as the continued weakening of previous real estate completions combined with the negative impact of the spread of the epidemic on consumer demand.
In addition, the sporadic epidemic also continued to suppress the recovery of service consumption, and the superimposed demand for rental housing remained weak, which also caused rental housing rents to continue to be weaker than seasonal increases, and the CPI of other services remained low. The core CPI was flat year-on-year at a low level of 0.6%.
Shenwan Securities pointed out that the supply of food is relatively stable, and the domestic demand for optional goods and services is relatively insufficient. The trend of CPI "great moderation" continues. The great moderation trend is still expected to continue until the whole of next year.
PPI has been positive or in a stable stage for two consecutive months
In November, affected by the rising prices of coal, petroleum, non-ferrous metals and other industries, PPI rose slightly month-on-month, and the growth rate was positive for two consecutive months; affected by the high comparison base in the same period last year, continued to decline year-on-year.
Dong Lijuan said that according to estimates, in the 1.3% year-on-year decrease in PPI in November, the carryover effect of last year's price changes was about -1.2 percentage points, and the impact of new price increases was about -0.1 percentage points.
Everbright Securities said that judging from the combination of year-on-year and month-on-month PPI in November and the year-on-year high of PPI in 2021, 's current PPI price should be in the stage of improvement and stabilization.
From a structural point of view, the year-on-year growth rate of the price of means of production in November was -2.3%, and the growth rate has come to an end for 12 consecutive months (the previous value was -2.5%); while the year-on-year growth rate of the price of living materials was 2% (previousThe value is 2.2%), the growth rate has dropped slightly, and the overall may still be in an upward channel since 2021. In November, the month-on-month growth rates of the prices of means of production and means of living were 0% and 0.1% respectively (the previous values were 0.1% and 0.5% respectively), confirming that the current PPI prices are in the stage of improvement and stabilization.
Shenwan Securities said that the PPI will rise relatively moderately in the first half of next year. Since October, OPEC+ production cuts have once pushed oil prices upward, and the transmission time lag of half a month has formed a transmission to the petrochemical industry chain PPI in November. The demand for coal storage in power plants in winter has increased, and coal prices have risen in October, but investment demand is still weak and still suppresses steel prices, and the PPI of the overall coal metallurgical industry chain has dropped month-on-month.
Shenwan Securities expectsBiden lost the House of Representatives in the mid-term elections, the United States shale oilmotivation to increase production began to recover, and oil prices dropped significantly, although OPEC+ production cuts and EU sanctions on Russian oil prices and embargoes came into effect, global crude oil supply The first half of next year will still be tight, but it will be better than previous market expectations. expects that the PPI will rise relatively moderately in the first half of next year.
Moderate inflation leaves room for fiscal and monetary policy
Looking ahead, Oriental Jincheng chief macro analyst Wang Qing Wang Qing said that pork prices will peak and fall, and weak consumption in the short term will continue to restrain the core Under the prospect of CPI growth, the year-on-year CPI in December may continue to remain at a moderate level within 2.0%, and there is no suspense that prices will stabilize in the fourth quarter. From the perspective of accumulation, in the first 11 months, the cumulative year-on-year increase of CPI was 2.0%, and that of PPI was 4.6%. Wang Qing predicts that the annual CPI in 2022 will be around 2.0% year-on-year, which is significantly lower than the control target of 3.0%. Taking into account the overall economic operation situation and the balance between supply and demand in the commodity and service markets, in 2023, under the trend of cooling global inflation, the potential inflation risk brought by the rebound of domestic consumption is not large. This means that around the end of the year, monetary and fiscal policies will have room to moderately exert force in the direction of stable growth.
Zhou Maohua, a macro researcher at the Financial Market Department of China Everbright Bank, also said that it is expected that the CPI will continue to maintain a moderate year-on-year trend next year. In the second quarter, the price of pork may face some downward pressure; the price of vegetables fluctuates greatly , but it is expected to maintain a moderate rise overall.
Zhou Maohua pointed out that the end of the Fed rate hike cycle has created favorable conditions for domestic macro-control . China is one of the few economies in the world that maintain normal policies. Although the domestic policy space has shrunk significantly compared with previous years, it remains adequate overall.
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