China’s consumer prices pick up more than expected in July, up by 0.5%

BEIJING
—
China’s
consumer
prices
rose
by
a
more-than-expected
0.5%
in
July
from
a
year
ago,
boosted
by
a
surge
in
pork
prices,
according
to
data
from
the
National
Bureau
of
Statistics
released
Friday.

Analysts
polled
by
Reuters
had
expected
a
slight
pickup
in
the
consumer
price
index
to
0.3%
in
July
from
a
year
ago,
versus
0.2%
in
June.

The
0.5%
CPI
increase
in
July
was
the
highest
since
a
0.7%
rise
in
February,
according
to
official
data
accessed
via
Wind
Information.
China’s
biggest
holiday
of
the
year,
the
Lunar
New
Year,
fell
in
February
this
year.

Prices
of
pork,
a
widely
consumed
food
staple
in
China,
surged
by
20.4%
year-on-year
in
July.
That
was
the
biggest
increase
since
December
2022,
according
to
Wind.

Pork
prices
play
a
significant
role
in
China’s
consumer
price
index,
but
can
be
prone
to
large
swings
due
to
disease
or
other
factors
affecting
production.

Core
CPI,
which
strips
out
food
and
energy
prices,
rose
by
0.4%
year-on-year
in
July.
That’s
down
from
0.6%
in
June.

“Conditions
are
in
place
to
see
inflation
trend
a
little
higher
in
the
coming
months
but
it
should
not
impede
further
monetary
easing,”
Lynn
Song,
chief
economist,
Greater
China,
ING,
said
in
a
note
Friday.

“With
low
inflation
and
weak
credit
activity,
domestic
factors
continue
to
favor
further
monetary
policy
easing,”
she
said.
“We
continue
to
look
for
at
least
one
more
rate
cut
this
year
with
the
potential
for
more
if
global
rate
cuts
accelerate.”

Song
pointed
out
that
the

price
war
in
autos,
falling
smartphone
prices
and
a
drop
in
rents
posed
near-term
drags
on
non-food
prices
in
China.

Tourism
prices
rose
by
a
modest
3.1%
in
July
from
a
year
ago,
versus
the
6.4%
year-to-date
increase,
the
statistics
bureau
data
showed.

Education
and
entertainment
prices
climbed
by
1.7%
in
July,
a
touch
below
the
2%
increase
for
the
year
so
far.

Transportation
fuel
saw
prices
rise
by
5.1%
in
July,
but
those
for
“transportation
tools”
fell
by
5.6%.
It
was
not
immediately
clear
from
the
statistics
bureau
website
what
the
category
included.

The
latest
CPI
report
also
revealed
signs
of
the
ongoing
real
estate
slump.

Rental
prices
fell
by
0.3%
year-on-year
in
July,
steeper
than
the
0.1%
drop
for
the
year
so
far,
the
statistics
bureau
data
showed.

Home
appliance
prices
fell
by
1.8%
in
July,
far
more
than
the
0.8%
year-to-date
decline.

The
producer
price
index
for
July
fell
by
0.8%
from
a
year
ago.
That
was
slightly
less
than
the
0.9%
forecast
decline,
and
unchanged
from
June’s
0.8%
drop.

Prices
of
building
materials
and
non-metallic
materials
fell
by
5.2%
in
July,
less
than
the
year-to-date
7.1%
decline,
the
data
showed.
Prices
of
non-ferrous
metals
and
wires
rose
by
11.3%
year-on-year
in
July,
while
that
of
fuel
and
power
rose
by
0.5%.

Last
week,
the
Caixin
Manufacturing
Purchasing
Managers’
Index
showed
a
drop
from
51.8
in
June
to
49.8
in
July.
That
marked
a
deterioration,
albeit
mild,
for
the
first
time
in
nine
months,
according
to
Caixin.
Readings
below
50
signal
contraction.

“Input
cost
inflation
eased
in
the
latest
survey
period,
which
alongside
heightened
competition
led
to
Chinese
manufacturers
lowering
average
selling
prices
in
July,”
the
Caixin
release
had
said.