China’s total retail sales of consumer goods in June increased by 2% compared with the same period last year. July data will be released on Thursday. August 15th.
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BEIJING – Data released by the National Bureau of Statistics on Friday showed that China’s consumer prices rose by 0.5% year-on-year in July, beating expectations, driven by rising pork prices.
Analysts polled by Reuters had expected the consumer price index to rebound slightly by 0.3% in July from a year earlier, compared with 0.2% in June.
Official data from Wind Information showed that the CPI rose by 0.5% in July, the highest since the 0.7% increase in February. February this year marks the biggest festival of the year in China – the Lunar New Year.
Pork is a widely consumed staple food in China, and its price increased by 20.4% year-on-year in July. This was the largest increase since December 2022, Wind data showed.
Pork prices play an important role in China’s consumer price index, but are prone to large fluctuations due to disease or other factors that affect production.
Core CPI, which excludes food and energy prices, increased 0.4% year-on-year in July. This was down from 0.6% in June.
Lynn Song, chief economist for Greater China at ING, said in a report on Friday that “the conditions are in place for inflation to trend slightly higher in the coming months, but this should not hinder further monetary easing.
“With low inflation and subdued credit activity, domestic factors continue to favor further easing of monetary policy,” she said. “We continue to seek at least one more rate cut this year, with further cuts likely if global rate cuts accelerate.”
Song pointed out, car price warFalling smartphone prices and falling rents have weighed on non-food prices in China recently.
According to data from the National Bureau of Statistics, tourism prices increased by 3.1% year-on-year in July, while the year-to-date increase is 6.4%.
Education and entertainment prices rose 1.7% in July, slightly slower than this year’s 2% increase.
Transportation fuel prices rose 5.1% in July, but “transportation” prices fell 5.6%. It’s unclear from the Bureau’s website what this category includes.
The latest CPI report also shows signs of continued downturn in real estate.
According to data from the National Bureau of Statistics, housing rental prices fell by 0.3% year-on-year in July, which was greater than the 0.1% decline this year.
Home appliance prices fell 1.8% in July, much higher than the 0.8% decline year-to-date.
Producer prices fall
The industrial producer price index fell by 0.8% year-on-year in July. That was slightly below the forecast decline of 0.9% and in line with June’s 0.8% decline.
Data show that the prices of building materials and non-metallic materials fell by 5.2% in July, which was smaller than the 7.1% decline year-to-date. In July, the price of non-ferrous metals and wires increased by 11.3% compared with the same period last year, and the price of fuel and power increased by 0.5%.
Last week, the Caixin Manufacturing Purchasing Managers’ Index fell to 49.8 in July from 51.8 in June. This marked the first deterioration in nine months, albeit slightly, Caixin reported. Readings below 50 indicate contraction.
“Input cost inflation eased during the latest survey period, and competition intensified, leading Chinese manufacturers to lower their average selling prices in July,” Caixin said in a release.
