Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Chinese inflation spikes on food costs

By Catherine Tymkiw, producer


NEW YORK (CNNMoney.com) -- Higher food prices continue to be the main driver of inflation in China, raising the likelihood of an imminent interest rate hike as the country tries to reel in its red-hot economy.

Consumer prices rose 5.1% for the 12 months ended Nov. 30, according to government data released early Saturday in China. That comes on the heels of a 4.4% jump in October. And once again, a surge in food costs is the culprit. Food prices rose 11.7% during the period.

Excluding food prices, China's CPI edged up only 1.9%.

Compare that with the United States, where the CPI has been sluggish for months. In October, the U.S. CPI increased a modest 1.2%, according to the Bureau of Labor Statistics. Excluding the volatility of food prices, the U.S. CPI rose 0.6%.

The U.S. trade balance narrowed to a more-than-expected $38.7 billion, bringing the U.S. trade deficit to a 9-month low.

But China is a different story.

China said its trade surplus narrowed to $22.9 billion in November -- a 16% decrease over October's $27.2 billion surplus. China's exports jumped 34.9%, while the country's imports rose 37.7%.

Fears of runaway inflation have led to rising speculation that the People's Bank of China will move to raise interest rates as early as this weekend.

Just one week ago, China said it would be more "prudent" about its monetary policy in 2011. And on Friday, the People's Bank of China raised the reserve requirement ratio for its banks by a half-percentage point for the third time in a month.

Month by month: CPI rose 1.1% in November, on a monthly basis. The increase was largely due to higher food prices. Meanwhile, core CPI was up a more modest 0.6%. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.64%3.69%
15 yr fixed2.76%2.82%
5/1 ARM3.07%3.06%
30 yr refi3.62%3.72%
15 yr refi2.78%2.84%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 15,914.74 -99.64 -0.62%
Nasdaq 4,283.59 14.83 0.35%
S&P 500 1,851.86 -0.35 -0.02%
Treasuries 1.70 -0.02 -1.39%
Data as of 6:11am ET
Company Price Change % Change
Bank of America Corp... 11.98 -0.22 -1.80%
Facebook Inc 101.00 1.46 1.47%
Pfizer Inc 29.49 0.39 1.34%
Apple Inc 94.27 -0.72 -0.76%
Microsoft Corp 49.71 0.43 0.87%
Data as of Feb 10
Sponsors

Sections

Asahi is in exclusive talks over a $2.9 billion deal to buy a bunch of businesses from SABMiller that include the storied beer brands Peroni and Grolsch. More

The Fed Chair was criticized on a range of issues, from China and monetary policy to black unemployment and the strong dollar. More

Twitter's stock is sinking fast after the company reported that it lost customers in the fourth quarter of 2015. More

STEM3 Academy was started specifically for students with autism, ADHD and Asperger's Syndrome. Its STEM-based curriculum is breaking through barriers. More

The average price for domestic airfare dropped in the third quarter of 2015, and travel experts expect the trend to continue in 2016. More