Charles-Henry Monchau, CFA, CMT, CAIA’s Post

China's consumer inflation cooled more than expected in March. China's March Consumer Price Index (CPI) rose by 0.1% year-on-year, falling below the 0.4% expectation. At the same time, the CPI for the month of March decreases by 1.0% from the previous month. The core consumer prices, deducting food and energy prices, increased by 0.6% yoy in March, slowing from the prior 1.2%. Producer prices continued to fall in March, falling by 2.8 percent compared to the previous year. #inflation #china #cpi #interestrates #ppi

Chart from True Insights showing how China's consumer prices tends to lead U.S. producer prices which leads into U.S. consumer prices. This gap will eventually close either by China's CPI moving higher, U.S. PPI moving lower, or a combination of both. Currently, this bodes well for inflation in the U.S. #china #cpi #ppi #inflation

China's annual inflation rate edged down to 0.2% in June 2024 from 0.3% in the prior two months, falling short of market estimates of 0.4%. It was the fifth straight month of consumer inflation but the lowest print since March, as food prices dropped for the 12th month. Meanwhile, producer prices shrank 0.8% yoy, extending falls for the 21st month.

“China’s consumer prices accelerated in August to the fastest pace in half a year due to the higher costs of food from weather disruptions, while producer price deflation worsened, as Beijing maintained efforts to reinvigorate domestic demand. A sputtering start in the second half is mounting pressure on the world’s second-largest economy to roll out more policies amid a prolonged housing downturn, persistent joblessness, debt woes and rising trade tensions. The consumer price index (CPI) rose 0.6% from a year earlier last month, versus a 0.5% rise in July, data from the National Bureau of Statistics (NBS) showed on Monday, but less than a 0.7% increase forecast in a Reuters poll of economists.” “Extreme weather this summer — from deadly floods to scorching heat — has pushed up farm produce prices, contributing to faster inflation. ‘Higher CPI in August was due to high temperatures and rainy weather,’ NBS statistician Dong Lijuan said in a statement. Food prices jumped 2.8% on the year in August from an unchanged outcome in July, while nonfood inflation was 0.2%, easing from 0.7% in July. Core inflation, excluding volatile food and fuel prices, was 0.3% in August, down from 0.4% in July. The consumer inflation gauge was up 0.4% month-on-month, compared with a 0.5% increase in July and missing economists’ expectations of a 0.5% gain. In unusually strong comments, China’s ex-central bank Gov. Yi Gang urged efforts to fight deflationary pressure at the Bund Summit in Shanghai last week.” “A national campaign to earmark $41 billion in ultralong treasury bonds to support equipment upgrades and trade-in of consumer goods has proven lukewarm in spurring consumer confidence, with domestic car sales extending declines for a fourth month in July. Faltering economic activity has prompted global brokerages to scale back their China 2024 growth forecasts to below the official target of around 5%. China has room to lower the amount of cash banks must set aside as reserves, a central bank official said on Thursday. The producer price index in August slid 1.8% from a year earlier, the largest fall in four months. That was worse than a 0.8% decline in July and below a forecast 1.4% fall.”

The push down to "just" +3.3% in US CPI was encouraged by China's Producer Price Index (PPI), which printed double-digit negative YoY's for several months in 2022 and 2023. This deflationary benefit has passed now that China's PPI series has stabilized and is once again rising.

More than double the previous month: China's CPI rises 0.5% in July 🇨🇳😲 Domestic consumer demand is believed to be the main cause of this increase, according to China's National Bureau of Statistics. In turn, and due to the lack of demand in the market and the fall in prices of some international raw materials, the country's producer price index (PPI) fell 0.8 percent year-on-year in the same month. #China #Asia #Consumption #CPI #Statistics

"The consumer price index slipped 0.3% in December from a year earlier, in line with economists’ expectations for a third straight month of declines. Factory-gate costs dropped 2.7% and have been falling for more than a year because of lower commodity prices and weak demand at home and abroad. Chinese exports, meanwhile, fell 4.6% over all of last year for the first time since 2016 — yet another knock to what has historically been a major pillar of growth for the world’s second-largest economy. The December data shows signs of a pickup, helped by favorable comparisons with a year ago. (...) The sustained deflation is also dragging down the value of Chinese exports and making them cheaper for foreign consumers. In October, the index of export prices hit the lowest in data back to 2006, and was only slightly higher in November. (...) The pace of decline in December’s CPI figure wasn’t as severe as the prior month. Food prices fell 3.7%, slightly better than November’s 4.2% drop. Core inflation — which strips out volatile food and energy prices — was 0.6% in December, unchanged from November."

https://lnkd.in/gH5aNc3a China’s inflation rate slowed in March, official data showed Thursday, as the consumer price index (CPI) last month edged up by 0.1 percent year-on-year, according to the National Bureau of Statistics (NBS), below the 0.4 percent gain forecast by a Bloomberg poll of analysts.