China's inflation jumps to 10 month high in February

Fresh data this morning shows that inflation in China rose more than forecast to a 10-month high of 3.2% in February, approaching the government target for the year. But the National Bureau of Statistics says the producer price index, dropped 1.6 percent, Michelle Xing has the details.

China's consumer price index increased 3.2 percent for the month of February from a year earlier, the highest pace in 10 months, and up from 2 percent in January. But keep in mind, data in the first two months of the year are distorted by the Chinese New Year holiday.

Li Yiheng, Senior representative from IMF China says the CPI should remain at 3 percent this year, but the potential of higher oil prices might put more pressure on inflation.

Consumer prices rose 2.6 percent in 2012, well below the government target of 4 percent. This year China has set the annual inflation target at 3.5 percent. Li says inflationary pressure is not yet back on the table.

Breaking down the numbers .... Food prices, which are a key component of the inflation basket in China, rose 6 percent year on year in February.

Non-food inflation was up 1.9 percent year on year.

Meanwhile, the PPI or the measure of wholesale prices fell 1.6 percent in February from a year earlier, the 12th straight month of decline and the same as January's drop.