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China CPI cools to 0.5% y/y in July as goods inflation weakens

The CPI fell to 0.5% year over year, below expectations, with goods prices showing a monthly decline while services stayed firmer.

Reported · Written up by our desk · Central Banks

China’s consumer inflation slowed more than expected in July, with the CPI easing to 0.5% year over year, down from 1.0% and below the 0.8% consensus estimate, according to Action Forex.

On a monthly basis, the CPI improved to -0.1% month over month, compared with -0.3% prior, still short of expectations for a 0.2% gain. Food prices fell 1.5% year over year, while non-food inflation was 0.9% year over year.

The breakdown also showed uneven pressure: goods prices rose only 0.2% year over year, versus a stronger 0.7% increase in services. Monthly data underscored the split, with goods prices falling 0.6% month over month and services rising 0.4%.

Action Forex also cited a broader macro picture, noting that producer-price inflation slowed from 4.1% to 3.5% year over year, below the 3.9% forecast, a mix that suggests limited domestic pricing power but some resilience in services inflation.

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