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consumer price index

The US Consumer Price Index (CPI) increased by 0.2% in October 2015, after two months of declines.

The figures, along with the strong employment numbers in October, increase speculation that the Federal Reserve will raise interest rates in December.

Prices were pushed up by the rising cost of electricity and a resurgence in petrol prices.

A survey of US fund managers by Bank of America Merrill Lynch found that four-fifths of the managers surveyed expected a rate rise next month.US CPI October 2015

The so-called core CPI, which strips out food and energy, also rose 0.2% after a similar increase in September.

Medical costs accounted for much of the increase. Medical care prices rose 0.7%, the largest increase since April, and hospital costs increased by 2%.

Although food prices rose only 0.1%, the smallest gain since May, they edged up 0.4% in September and four out of six of the indexes compiled by the big grocery store food groups showed the largest increase since August 2011.

The biggest price falls were in clothing, shoes and new cars.

Over the entire 12 months through to October, the core CPI increased by 1.9%.

China’s consumer price index (CPI) rose 1.6% in September 2015 compared with a year earlier, the country’s National Bureau of Statistics (NBS) said.

That was lower than analysts’ forecasts of 1.8%, and down from the rate of 2% recorded in August 2015.

Producer prices fell for a 43rd straight month as manufacturers cut prices to win business.

The latest inflation figures added to fears of a rapid slowdown in China, the world’s second largest economy.

Photo Reuters

Photo Reuters

Asian markets were all lower in response to the inflation figures, which came a day after data that showed imports fell for an 11th straight month in September.

China’s producer price index (PPI) fell 5.9% in September 2015 from a year earlier, matching the rate of decline in August, which marked the biggest fall since the financial crisis.

Non-food consumer inflation was even lower with an annual growth rate of just 1% in September, the NBS data showed.

The easing CPI was mainly due to a high comparison base last year, Yu Qiumei, a senior NBS statistician, said.

CPI rose 0.5% month-on-month in September 2014, compared to a 0.1% growth last month.

Reflecting growing strains on Chinese companies from persistently weak demand and overcapacity, manufacturers continued to cut selling prices to win business.

China has already launched a wave of economic stimulus measures since late 2014, including cutting benchmark interest rates five times since November, but some analysts believe the moves have been less effective than when the economy was more tightly controlled, exports were strong and debt levels were much lower.

Weak producer prices are also threatening to erode the profits of Chinese companies and add to their debts, something analysts expect to continue for the remainder of the year.

The inflation figures come as trade data on October 13 showed imports tumbled for the 11th month in a row in September, as result of weaker global commodity prices and lower demand. Exports also fell for a third month, although by less than expected.

Other surveys showed activity in China’s factory sector shrank in September on fewer new orders, sparking fears the Chinese economy may be slowing down more rapidly than expected.

China will release gross domestic product (GDP) data for Q3 of 2015 on October 19. Many economists expect the three months to September to show economic growth fell below the government’s target of 7% for the first time since the financial crisis.

China’s rising food prices pushed up inflation to a one-year high in the world’s second largest economy.

The consumer price index (CPI) unexpectedly rose to 2% in August from a year ago, mainly on higher food prices and not due to a pickup in economic activity.

On the back of that, the producer price index (PPI) fell 5.9% – marking its 42nd consecutive month of declines.

Deflation fears in China are growing as manufacturers continue to cut prices.China CPI August 2015

The PPI decline was the biggest drop since the global financial crisis in 2009 due to falling commodity prices and slumping demand.

Economists said the continuing fall in producer prices poses the risk of trickling through to consumer prices.

Meanwhile, pork prices which weigh heavily on consumer prices in China, rose from 16.7% last year to 19.6% in August, while vegetable prices surged from 9.7% to nearly 16%.

Economists are expecting the government to step up with more policy measures to stimulate the economy.

Speaking at the World Economic Forum in Dalian on September 10, Chinese PM Li Keqiang was the latest policymaker to reiterate that the government will continue to support the economy to ensure stable growth.