China's July CPI rose by 0.5% year-on-year, while PPI fell by 0.8% year-on-year

In July, consumer demand continued to recover, coupled with the impact of high temperatures and rainfall in some areas, the national CPI turned from a decrease to an increase on a month-on-month basis, with the year-on-year growth rate slightly expanding; affected by factors such as insufficient market demand and the decline in prices of some international commodities, the month-on-month and year-on-year declines in the national PPI remained the same as the previous month.

On Friday, August 9th, data released by the National Bureau of Statistics showed that China's CPI in July increased by 0.5% year-on-year, compared to 0.2% previously; PPI decreased by 0.8% year-on-year, the same as before.

Specifically: In July, the national consumer price index rose by 0.5% year-on-year. Among them, urban areas increased by 0.5%, rural areas increased by 0.7%; food prices remained stable, non-food prices rose by 0.7%; consumer goods prices rose by 0.5%, service prices rose by 0.6%. On average from January to July, the national consumer price index increased by 0.2% compared to the same period last year.

In July, the PPI decreased by 0.8% year-on-year, with the month-on-month and year-on-year declines remaining the same as the previous month. The national industrial producer price index decreased by 0.8% year-on-year and 0.2% month-on-month, with the declines the same as the previous month; the industrial purchase price index decreased by 0.1% year-on-year and month-on-month. From January to July, the industrial producer price index decreased by 2.0% year-on-year, and the industrial purchase price index decreased by 2.2%.

Dong Lijuan, Chief Statistician of the Urban Division of the National Bureau of Statistics, provided the following interpretation:

In terms of year-on-year comparison, the CPI increased by 0.5%, expanding by 0.3 percentage points compared to the previous month. Specifically, food prices changed from a 2.1% decrease last month to stable this month. Within food prices, pork prices rose by 20.4%, with an increase of 2.3 percentage points compared to the previous month; fresh vegetables and eggs prices changed from a 7.3% and 4.4% decrease last month to a 3.3% and 0.8% increase this month, respectively; the price declines of fresh fruits, edible oils, beef, and lamb ranged from 4.1% to 12.9%, with narrower declines. Non-food prices rose by 0.7%, with a decrease of 0.1 percentage points compared to the previous month, contributing to a year-on-year CPI increase of approximately 0.54 percentage points. Industrial consumer goods prices rose by 0.7%, with a decrease of 0.1 percentage points, where gasoline prices fell to 5.3% and fuel for small cars decreased by 6.3%.

In terms of year-on-year comparison, the PPI decreased by 0.8%, the same as the previous month. Among them, the prices of production materials decreased by 0.7%, narrowing by 0.1 percentage points compared to the previous month; the prices of living materials decreased by 1.0%, expanding by 0.2 percentage points. In major industries, prices in the non-metallic mineral products industry decreased by 5.6%, prices in the black metal smelting and processing industry decreased by 3.7%, prices in the electrical machinery and equipment manufacturing industry decreased by 2.8%, prices in the agricultural and sideline food processing industry decreased by 2.7%, prices in the computer communication and other electronic equipment manufacturing industry decreased by 2.6%, and prices in the automobile manufacturing industry decreased by 2.1%. These six industries are the main factors contributing to the year-on-year decline in PPI, collectively pulling down the PPI by approximately 1.25 percentage points

CPI MoM turns from decline to rise, with a slight increase in YoY growth

In July, the national consumer price index (CPI) rose by 0.5% month-on-month. Specifically, urban areas saw a 0.6% increase, while rural areas saw a 0.4% increase. Food prices rose by 1.2%, non-food prices rose by 0.4%, consumer goods prices rose by 0.4%, and service prices rose by 0.6%.

YoY Changes in Prices of Various Goods and Services

In July, prices of food, tobacco, and alcohol rose by 0.2% year-on-year, contributing to an approximately 0.07 percentage point increase in the CPI. Within food prices, the prices of livestock meat rose by 4.9%, contributing to a 0.14 percentage point increase in the CPI. Among them, pork prices rose by 20.4%, contributing to a 0.24 percentage point increase in the CPI; vegetable prices rose by 3.3%, contributing to a 0.07 percentage point increase in the CPI; aquatic product prices rose by 1.2%, contributing to a 0.02 percentage point increase in the CPI; and fresh fruit prices fell by 4.2%, leading to a 0.09 percentage point decrease in the CPI.

The prices of the other seven categories rose in YoY terms, with six rising and one falling. Specifically, prices of other goods and services and education, culture, and entertainment rose by 4.0% and 1.7% respectively, while clothing and healthcare prices rose by 1.5% and 1.4% respectively. Prices of daily necessities and services and housing rose by 0.7% and 0.1% respectively, while transportation and communication prices fell by 0.6%.

MoM Changes in Prices of Various Goods and Services

In July, prices of food, tobacco, and alcohol rose by 0.7% month-on-month, contributing to an approximately 0.21 percentage point increase in the CPI.

Within food prices, vegetable prices rose by 9.3%, contributing to a 0.18 percentage point increase in the CPI; egg prices rose by 3.7%, contributing to a 0.02 percentage point increase in the CPI; livestock meat prices rose by 0.8%, contributing to a 0.02 percentage point increase in the CPI. Among them, pork prices rose by 2.0%, contributing to a 0.03 percentage point increase in the CPI; aquatic product prices rose by 0.4%, contributing to a 0.01 percentage point increase in the CPI; grain prices fell by 0.3%, leading to a 0.01 percentage point decrease in the CPI; and fresh fruit prices fell by 0.3%, leading to a 0.01 percentage point decrease in the CPI.

The prices of the other seven categories rose in MoM terms, with four rising, two remaining unchanged, and one falling.

Specifically, education, culture, and entertainment prices rose by 1.3%, while transportation and communication, as well as other goods and services prices, both rose by 0.9%. Prices of daily necessities and services rose by 0.4%; housing and healthcare prices remained unchanged; and clothing prices fell by 0.4%

National PPI MoM and YoY Declines Remain the Same as Last Month

Changes in YoY Industrial Producer Prices in July

In the ex-factory prices of industrial producers, the prices of production materials decreased by 0.7%, affecting a total decline of about 0.52 percentage points in the ex-factory prices of industrial producers.

Among them, the prices of mining industry rose by 3.5%, raw materials industry rose by 1.8%, and processing industry fell by 2.1%. The prices of living materials decreased by 1.0%, leading to a total decline of about 0.26 percentage points in the ex-factory prices of industrial producers. Specifically, food prices fell by 0.7%, clothing prices fell by 0.5%, general daily necessities prices fell by 0.3%, and durable consumer goods prices fell by 2.0%.

In the purchase prices of industrial producers, prices of building materials and non-metallic materials fell by 5.2%, prices of black metal materials fell by 2.6%, prices of agricultural and sideline products fell by 1.9%, and prices of textile raw materials fell by 0.5%; prices of non-ferrous metal materials and wires rose by 11.3%, prices of chemical raw materials rose by 0.6%, and prices of fuel and power rose by 0.5%.

Changes in MoM Industrial Producer Prices in July

In the ex-factory prices of industrial producers, the prices of production materials decreased by 0.3%, leading to a total decline of about 0.23 percentage points in the ex-factory prices of industrial producers.

Among them, the prices of mining industry rose by 0.7%, raw materials industry fell by 0.2%, and processing industry fell by 0.4%. Prices of living materials remained stable. Specifically, food prices fell by 0.2%, clothing prices and general daily necessities prices both rose by 0.1%, and durable consumer goods prices rose by 0.2%.

In the purchase prices of industrial producers, prices of black metal materials fell by 0.6%, prices of fuel and power, prices of chemical raw materials all fell by 0.2%, prices of building materials and non-metallic materials, prices of textile raw materials all fell by 0.1%; prices of agricultural and sideline products rose by 0.4%, and prices of non-ferrous metal materials and wires rose by 0.3%.