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 fixed3.79%3.64%
15 yr fixed2.94%2.76%
5/1 ARM2.95%2.93%
30 yr refi3.78%3.69%
15 yr refi2.96%2.81%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,851.51 145.46 0.82%
Nasdaq 4,894.89 33.83 0.70%
S&P 500 2,090.54 14.48 0.70%
Treasuries 1.87 0.01 0.59%
Data as of 1:18am ET
Company Price Change % Change
Bank of America Corp... 14.92 0.24 1.63%
Chesapeake Energy Co... 4.35 0.30 7.41%
Freeport-McMoRan Inc... 11.65 0.54 4.86%
Hewlett Packard Ente... 17.35 1.10 6.77%
Apple Inc 99.62 1.72 1.76%
Data as of May 25
Sponsors

Sections

Shari Redstone seems to be at the center of the turmoil engulfing Viacom and her father Sumner Redstone. More

Andrew Crider lost his welding business and his home when the real estate market crashed. Now the Nevada man is offended by comments Donald Trump made showing the billionaire rooted for the housing collapse. More

Theranos faces a possible class action lawsuit just one week after it issued thousands of corrections to its blood tests. More