(Bloomberg) — China\u2019s consumer prices unexpectedly increased in October, as holidays during the month boosted travel, food and transport demand \u2014 a pick-up many economists saw likely as fleeting.<\/p>\n
The consumer price index rose 0.2% from a year earlier, after a 0.3% decline in September, according to data released by the National Bureau of Statistics on Sunday. The median forecast of economists surveyed by Bloomberg was for a 0.1% drop. China\u2019s core CPI, which excludes volatile items such as food and energy, climbed 1.2%.<\/p>\n
Most Read from Bloomberg<\/p>\n
Service costs also edged up 0.2% last month and contributed to the rise in inflation, according to the statistics bureau. Factory-gate deflation eased, despite persisting for a 37th straight month. <\/p>\n
\u201cThe broad-based price increases likely reflect seasonal demand around the Golden Week,\u201d Goldman Sachs Group Inc. economists wrote in a note. \u201cIts durability remains to be seen.\u201d<\/p>\n
What Bloomberg Economics Says…<\/p>\n
\u201cConsumer prices swinging back to inflation reflect a holiday boost that will fade. In other words, deflationary pressures remain entrenched \u2014 and weaker growth in the fourth quarter means there\u2019s little to change the trend.\u201d<\/p>\n
\u2014 Eric Zhu<\/p>\n
Read the full note here.<\/p>\n
China has faced deflationary pressures in recent months, recording declines in prices for August and September. The country\u2019s GDP deflator \u2014 the broadest measure of prices \u2014 has been in decline for over two years, the longest streak since the quarterly data began in 1993.<\/p>\n
That deflationary spiral could be even deeper than what the official numbers show. A Bloomberg News analysis of almost 70 everyday products and services from multiple sources showed prices dropped more sharply than the headline Consumer Price Index indicates, especially for goods that ordinary consumers buy.<\/p>\n
Persistent deflation encourages consumers to delay purchases, increases the debt burden and reduces profit margins, risking a downward spiral of weaker spending and lower investment.<\/p>\n
Breaking this cycle has become a top policy priority. Beijing has launched a so-called \u201canti-involution\u201d campaign, an effort to stamp out the price wars that have plagued industries from electric vehicles to food delivery.<\/p>\n
But progress has been limited, with the government concerned about the risk of job losses and weaker economic growth.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — China\u2019s consumer prices unexpectedly increased in October, as holidays during the month boosted travel, food and…\n","protected":false},"author":2,"featured_media":127781,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[902,35912,138,607,29507,29364,219,88679,23767,111,139,69,88680],"class_list":["post-127780","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-bloomberg","tag-bloomberg-news","tag-business","tag-china","tag-consumer-prices","tag-deflationary-pressures","tag-economy","tag-food-court","tag-national-bureau-of-statistics","tag-new-zealand","tag-newzealand","tag-nz","tag-transport-demand"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/127780","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=127780"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/127780\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/127781"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=127780"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=127780"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=127780"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}