What is CPI?
In economics, said the retail price index, also known as the Consumer Price Index (Consumer Price Index, CPI) is to investigate the urban working residents to purchase a specific commodity prices mean a series of statistical indicators. It is one of the key indicators to measure inflation. CPI is a fixed amount and not reflect the commodity price index for quality improvement or decline, the new product is not considered.
CPI is to reflect the living-related products and services price index for price changes figured out, if the consumer price index increase is too large, indicating that inflation has become a destabilizing factor in the economy, the central bank would tighten monetary policy and fiscal policy risk, resulting in the uncertain economic outlook. Therefore, excessive increase in the index are often not in the market.
For example, in the past 12 months, consumer price index rose 2.3%, it means that the cost of living an average of more than 12 months ago, an increase of 2.3%. When the cost of living increase, the value of your money will drop. That is, a year ago, received a 100 dollar note, you can buy today is only 97.70 yuan worth of goods and services. Generally speaking, when the CPI 3% increase when we called INFLATION, is inflation; and when the CPI 5% increase, we called him SERIES INFLATION, is the serious inflation.
PPI What does it mean?
Producer Price Index (PPI): Producer Price Indexes Producer Price Index, the main purpose of measuring a variety of goods in different stages of the price changes of production conditions. In general, the production of goods is divided into three stages: First, complete the stage: no longer do any processing of goods to this procedure; Second, the intermediate stage: product requires further processing; third, the original stage: goods not make any processing.
PPI is a measure of movements in industrial product prices and changes in the index level is an indication of price movements during the production areas of key economic indicators, is also formulating economic policies and an important basis for national accounts. At present, the investigation of PPI than 4,000 kinds of products (including more than 9500 kinds of specifications of goods), covering all 39 categories of industrial sectors, 186 species involved in the investigation.
conduction law according to the price, PPI has a certain impact on the CPI. PPI price levels reflect the production processes, CPI price level of consumer sectors. General volatility of the overall price level first appeared in the production area, and then through the industrial chain to the proliferation of downstream industries, and finally spread to consumer goods. Chain can be divided into two: First, the production of industrial raw materials, there is production of raw materials → → subsistence conduction. Another is the production of agricultural products as raw materials, there is agricultural production of ahttp://www.xmzzsz.comgricultural products → → food conduction. In China, for these two pathways, the current second, that the transmission of agricultural products to the food more fully and, since 2006, food prices are the main factors driving up CPI. But first, the industrial base to the CPI is the failure of the transmission.
CPI includes not only the prices of consumer goods, including service price, CPI and PPI are not strictly in the statistical coverage on the corresponding relationship between the CPI and PPI changes so inconsistency is possible. CPI and PPI continues to remain away from state laws that do not meet the price transmission. Price transmission is largely due to a fracture in a buyer market and the industrial market, the government artificially control the price of public goods.
in different market conditions, prices of industrial goods to the final consumer price transmission, there are two possible scenarios: First, a seller market conditions, prices of industrial products due to rising costs (such as electricity, water, coal and other energy, raw materials prices) rose eventually successfully transmitted to the consumer price; Second, in a buyer market conditions, due to oversupply, prices of industrial products is difficult to pass on to consumer prices, companies need to profit on the rising cost of compression to be digested, and its The results show for the middle and lower price stability, and may even continue to decline, corporate profits decline. Difficult to absorb cost increases for some companies, could face bankruptcy. Can successfully transfer the industrial product price (mainly electricity, coal, water and other energy raw material prices) are present, the scope of government price adjustment. In the upstream product prices (PPI) continued to rise in the situation, companies can not successfully pass on the upstream costs, so that the final consumer prices (CPI) increased, eventually lead to reduction in corporate profits.
GDP Introduction
GDP gross domestic product is the abbreviation of the English, that is, gross domestic product. GDP generally is defined as: a period of time (one quarter or year), a country or region economy in the production of all final goods and services the total value of the market value.
In economics, commonly used GDP and GNP (gross national product, gross national product) to measure the common areas of the country or the general level of economic development of integrated indicators. This is currently often used in various countries and regions, the measurement means.
GDP is the macro economic statistics in the most attention, because it is considered the most important measure of national economic development of an indicator. In general, there are three forms of gross domestic product, ie value, income, and products. The form of value, it is the production of all resident units during a given period the value of all goods and services over the same period investment in fixed assets of all non-difference between the value of goods and services that all resident units and the increase in value; from income The form of it is all the permanent units in certain period of time and income creation; the form of products, it is the end-use goods and services minus imports of goods and services. GDP reflects the economic value added of the sector total.
PMI mean?
PMI or PMI (Purchase Management Index), the English abbreviation for PMI. PMI is a monthly release, and comprehensive economic monitoring indicator system into manufacturing PMI, service sector PMI, there are also some countries have established a construction PMI. Currently, more than 20 countries around the world have established the PMI system, the world manufacturing and services PMI has been established. PMI is through a monthly survey of purchasing managers index of aggregate out, reflecting the trend of the economy.
PMI has five characteristics:
1. is timely and the pilot. As a result of rapid and simple methods of investigation, in time, well ahead of other official data. 2. A comprehensive and instructive. PMI is a comprehensive index system, covering various aspects of economic activity, the composite index reflects the overall economic situation and the general trend, and the indicators also reflect the enterprise supply and procurement activities of the various sides.
3. the authenticity and reliability. PMI survey for the procurement and supply manager directly to obtain the raw data without any changes, and using the scientific method through the summary statistics, calculated to ensure the authenticity of data sources.
4. scientific and reasonable. According to the contribution of industry to GDP to determine the proportion of each industry sample, and to consider geographical distribution and different types of businesses to determine the random sample.
5. simple and easy.
PMI calculated, you can compare with the previous month. If the PMI is greater than 50%, said the economic rise, and vice versa tend to decline. In general, the aggregate index of manufacturing after more than 50%, indicating that the manufacturing economy is growing, less than 50% said the manufacturing economy declined.
PMI index system both for government departments, financial institutions, investment companies, or enterprises, in terms of economic forecasts and business analysis are important.
First of all, regulation of the government departments, financial institutions and investment companies an important basis for decision making. It is a first indicator. According to the expert analysis, PMI index is highly correlated with GDP, and the turning point is often several months ahead of the GDP. In the past 40 years, U.S. manufacturing PMI, a leading commercial climax of the peak can be more than six months, and several months leading commercial slump. Also you can use it to analyze industry information. GDP according to the relationship between industry and the analysis of the industry trends and changes.
Second, determine the enterprise applications industry, timely supply of PMI and the overall trend to better decision-making. PMI companies can assess the current or future use of economic trends to determine its potential impact to achieve business goals. At the same time, enterprises can also be based on the overall economic situation impact on the market to determine the procurement and pricing strategies.
purchasing managers index and by the National Bureau of Statistics of China Federation of Logistics & Purchasing working together to complete, is the rapid and timely reflection of market dynamics and leading indicators, which include manufacturing and non-manufacturing purchasing managers index, together with the GDP composition China macroeconomic indicators system. At present, the purchasing managers index survey has been included in the official National Bureau of Statistics survey system.
China Manufacturing Purchasing Managers Index System, including a total of 11 index: new orders, production, employment, supplier delivery, inventories, new export orders, procurement, finished goods inventory, purchase, import, backlog of orders. Manufacturing Purchasing Managers Index (PMI) is a composite index, calculated over the world. Such as the manufacturing PMI index above 50%, reflecting the overall economic expansion in the manufacturing sector; less than 50%, while the manufacturing sector generally reflect the overall economic recession.
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how to look at GDP and CPI, PPI departure from the
Core Tip: large-scale investment driven economic growth can not be sustained, because the consumption of this aircraft carriage does not start, investment spawned Production capacity can not ultimately be digested, stocks will rise there, the product of poor sales, business efficiency decline, eventually leading to a waste of productive forces and big damage.
16 am, the State Statistical Bureau spokesman described the operation of the first half of the economy. Preliminary accounting, 13.9862 trillion yuan in the first half of GDP, calculated at comparable prices, an increase of 7.1%, 1.0 percentage points to speed up the first quarter. In the first half, consumer prices fell 1.1% (in June fell 1.7%, down 0.5%). PPI fell 5.9% (in June fell 7.8%). (July 16 Xinhua)
economics from the general sense, the body of a healthy economic performance, GDP growth and CPI, PPI should be positively correlated with consistency. In general, deflation must eventually lead to economic recession, inflation and high economic growth associated. After the outbreak of the global financial crisis, the United States, Europe, Japan and other countries and economies, changes in economic development and price levels, changes in industrial prices have remained consistent.
and China since February this year, GDP growth and CPI, PPI has been in a serious departure from the status change. GDP grew 6.1% in the first quarter, an increase of 7.1% in the first half, while the CPI has been in decline, down 1.6%, respectively, 1.2%, 1.5%, 1.4% and 1.7%; first half of the producer price index fell 5.9% And from January to June, up by showing a gradual decline in the trend of expansion, 1-June decreased by 3.3%, 4.5%, 6.0%, 6.6%, 7.2% and 7.8%.
This shows that China domestic consumption of stimulating effect on the economy did not start up from the root. To see prices still in decline now reality, the consumer will is not strong, is still insufficient aggregate demand, economic growth not only deviated from the price trend and is still below the potential growth, overcapacity in some industries, capacity utilization of partial low. The second quarter of this year, the steel industry capacity utilization rate is only 73.1%, 65.7% aluminum metallurgy, iron alloy of 70.4%. PPI is the concentrated reflection of sharp decline. In the consumer slump, the total situation of insufficient demand, foreign trade has seen a continued sharp decline. The first half of the total import and export of 946.1 billion U.S. dollars, down 23.5%. Among them, the export of 521.5 billion U.S. dollars, down 21.8%; import 424.6 billion U.S. dollars, down 25.4%.
we all know, the troika pulling the economy: consumption, investment and exports. Current situation is that weak consumption, there is no fundamental start; import and export trade continued to decline sharply, there is no fundamental improvement. Troika has a problem in two, three legs there are two short legs. This fully shows that GDP growth this year is completely the stimulation of investment. Figures also prove this point. In the first half, total fixed asset investment 9.1321 trillion yuan, an increase of 33.5%, higher than the year earlier, accelerating 7.2 percentage points. Among them, the urban fixed asset investment 7.8098 trillion yuan, up by 33.6% (up 35.3% in June), to speed up 6.8 percentage points; rural fixed assets investment 1.3223 trillion yuan, up by 32.7%, accelerating 9.5 percentage points.
GDP growth and CPI, PPI away from the direction of change, exposing the existence of China economic operation of some serious problems can not be ignored.
a healthy economy, the role of consumption in driving the economy more than two-thirds of the general, large-scale investment as a response to the financial crisis, emergency measures can be sudden, but never as a long-term strategy. Otherwise, it would have serious economic problems. This problem has been shown in China.
large-scale investment driven economic growth can not be sustained, because the consumption of this aircraft carriage does not start, the investment eventually gave birth to the production capacity can not be digested, stocks will rise there, the product of poor sales, business efficiency decline, eventually leading to productivity of the large waste and havoc.
4 trillion of investment part of the implementation and delivery of large credit 7.4 trillion, is creating and inflate asset price bubbles. 6, the end of broad money supply (M2) balance of 56.9 trillion yuan, up 28.5% over the previous year to speed up 10.6 percentage points; narrow money supply (M1) balance of 19.3 trillion yuan, up 24.8%, 15.7 percentage points to speed up ; market currency in circulation (M0) balance of 3.4 trillion yuan, up 11.5%, down 1.2 percentage points. So much credit, so fast the money supply growth, has made just hit bottom, a very weak real economy unbearable and digestion, there has been excess liquidity, leading to the credit of the spillover effects. The excess liquidity flowed into stock and property markets, overflow to the stock and property markets. Therefore, blowing bubbles (loan asset bubbles blown into the stock and property markets) and the invoice ticket (issued currency) can not afford to support the Chinese economy and may lead to financial risks. Just asset price inflation and the bubble, we can not simply say that is inflation. Because it more harmful than inflation. Inflation must be accompanied by overheating of the economy growth, rising consumption, and asset price inflation can only bring about economic and financial risks, leading to stagflation consequences.
asset price inflation and the wealth effect bubble and the real economy to attract capital into the stock and property markets, attracting large inflows of international hot money stock and property markets (6 exceeded 2 trillion of foreign exchange reserves at the end of that show), which in turn prompted increased asset price inflation This is a very dangerous vicious circle.
Therefore, we must find ways to stimulate private investment through the investment power of the endogenous start, we must effectively increase the consumption of the economic pull of the contribution, must make substantial investments into the real economy, the strict grasp the funds to invest. In order to make our economy out of the pace of the economic crisis is a little more solid.
GDP (Gross Domestic Product) – gross domestic product (all conducted in China can be counted as such)
GNP (Gross National Product) – gross domestic product (only statistics the assets of Chinese nationality statistics)
GNP is a country (or region) all nationals of new production in a given period the value of goods and services combined. GNP is based on the principle of national accounts, as long as a country (or area) residents, whether in the territory (or region) live, their production and business activities of the newly created value added should be taken into account. For example, the residents of our country abroad by labor export revenue received should be counted in the GNP.
GDP is a country (or region) of all resident units during a given period all production and business activities, the final results. GDP accounting is based on the principle of production and operation of land the final results. For example, foreign-funded enterprises in China should be the value added created in the calculation of GDP.
GNP and GDP relationship: GNP equals GDP plus its investment in foreign capital and labor income minus the foreign investment in domestic capital and labor income. Example in 2001, the year was 9,593.3 billion yuan of GDP, GNP was 9.4346 trillion yuan, 158.7 billion yuan for the difference between the two, that in 2001, foreign investment and China value added work and more than China in foreign investment and labor export value added and more than 158.7 billion yuan.
Since 1985, China State Council approved the establishment of a national economic accounting system, formally adopted by the GDP accounted for the results of the national economy. Currently, we have adopted the United Nations System of National Accounts 1993 (SNA) method, and to develop a unified approach to national statistical systems at all levels of government statistics accounted for separately, the classification of their GDP accounting method. Now say the economy is the general use of total GDP indicators.
acquisition of foreign exchange bank foreign exchange assets and the corresponding launch of the national currency. In general, the trade surplus, inflows of foreign capital use and factors such as hot money from overseas is a significant increase in foreign exchange caused by the major promoter.
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