China's inflation sinks below 1 percent as nation heads into Lunar New Year holiday

Economic IndicatorsAssociated Press

China's inflation fell below 1 percent in January as the country headed toward the Lunar New Year holiday.

Government data showed Tuesday that consumer prices rose 0.8 percent, down from December's 1.5 percent gain. Food prices, a big concern for many families, rose by a modest 1.1 percent.

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The easing in inflation was due in part to the Lunar New Year holiday, which begins at different times in January or February each year. Last year the holiday, when prices rise as families stock up for banquets, began Jan. 31 but this year it doesn't come until Feb. 18.

Julian Evans-Pritchard of Capital Economics said in a report the moderation should be short-lived. He said inflation was likely to bounce back in February and should average 1.5 percent for the year.