(Bloomberg) -- China’s consumer inflation slowed to below 1% for the first time in more than three years, dragged down by lower pork prices and a higher base from last year. Factory gate prices continued to decline.
- The consumer price index rose 0.5% last month from a year earlier, the slowest pace since late 2009, the National Bureau of Statistics data said Tuesday. The median estimate in a Bloomberg survey was for a 0.8% increase.
- Core inflation, which removes the more volatile food and energy prices, rose 0.5%.
- Factory deflation persisted, with the producer price index declining 2.1% on year, the same pace as in September. The median forecast was for a 1.9% contraction.
Key Insights
- Pork prices, a key element in the country’s CPI basket, fell 2.8%. Wholesale pork prices began falling in October from the level a year earlier, the first drop in more than a year.
- High-frequency data showed slightly weaker food prices, with the monthly average vegetable price flat from September and pork prices declining, according to Wang Tao, chief China economist at UBS AG. Non-food prices likely rose from September as the economy continued to recover, she wrote before the data was released.
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- China’s recovery is gaining momentum, with manufacturing expanding for the eighth straight month in October and the services purchasing managers’ index at the highest since June 2012.
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