A hint of good economic news emerged from the Chinese economy on Friday, with inflation showing more signs of stirring.
After more than a year of downward pressure on prices, pork prices in China reversed direction in July and pushed the Consumer Price Index (CPI) up more than expected.
Data from the country’s National Bureau of Statistics on Friday showed China’s consumer prices rose 0.5% in July from a year ago. This was higher than the market’s forecast of a 0.3% increase in the CPI and left the monthly rate at 0.5% as well—the first gain since April.
The price of livestock meat rose by 4.9%, with pork prices surging by 20.4%. Seven of the eight categories saw higher prices, with the prices of other goods and services rising 4.0% and education, culture, and entertainment rising by 1.7%. However, the cost of transportation and communication prices fell by 0.6%.
This marked the sixth consecutive month of consumer inflation, indicating a slow improvement in domestic demand.
Core consumer prices, after deducting food and energy costs, were up 0.4% year-on-year, the smallest rise in six months. Producer prices also remained stagnant with an annual fall of 0.8% in July after a monthly decline of the same amount.
This was the best result for producer prices since the start of 2023 but also marked the 22nd consecutive month of producer deflation, reflecting weak domestic demand further. The PPI was down 2% over the first seven months of this year.