Consumer prices jump by the most in more than 2 years

China’s consumer price index rose 2.8% in September from a year ago as food prices, particularly pork, rose.

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BEIJING (Reuters) – Consumer prices in China rose in September at their fastest pace in more than two years as pork prices soared, the National Bureau of Statistics said on Friday.

The consumer price index rose 2.8% last month from a year ago, in line with expectations from a Reuters poll.

This is the fastest pace since a 3.3% year-over-year increase in April 2020, according to Wind Information.

Much of the gains came from a continued recovery in hog prices, which rose 36% year-over-year for their biggest gain since August 2020, according to data from Wind. Pork, a staple food in China, ranks high in the country’s official consumer price index.

However, other indicators pointed to sluggish consumer demand.

Excluding food and energy, the so-called core CPI was up just 0.6% from a year ago – the slowest pace since March 2021, according to Wind.

China’s producer price index rose 0.9% in September from a year ago, missing Reuters’ estimate by 1%. The index saw its slowest growth since January 2021, according to Wind.

Weak core CPI and a disappointing slowdown in China’s producer price index reflect weak demand from Chinese consumers and falling foreign demand, said Bruce Pang, chief economist and head of of Research, Greater China, JLL.

He said the producer price index is expected to decline further and potentially enter negative territory in the coming months.

Impact on US inflation

Changes in China’s producer price index tend to precede similar changes in the United States by about a month or two, Francoise Huang, senior economist at Allianz Trade, said in an interview. phone call earlier this week.

She said China’s weak economy could help other countries’ central banks struggling with domestic inflation.

After decades of high price hikes, the US Federal Reserve has raised interest rates five times this year and is expected to raise them again in three weeks.

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