On November 9, data released by the National Bureau of Statistics showed that China's Consumer Price Index (CPI) rose 0.2% month-on-month and 0.2% year-on-year in October. The core CPI, which excludes food and energy prices, increased 1.2% year-on-year, marking the sixth consecutive month of expansion. Meanwhile, the Producer Price Index (PPI) shifted from flat in September to a 0.1% month-on-month increase—the first rise this year—while the year-on-year decline narrowed by 0.2 percentage points to 2.1%, continuing a three-month trend of contraction easing.
Analysts suggest the latest price data reflects broad-based improvements, with domestic consumption demand—particularly in services—showing steady recovery. Over the next quarter, CPI is expected to maintain moderate year-on-year growth. Improved orders driven by demand recovery will continue to support industrial goods prices, and as competition in some oversupplied industries optimizes, the year-on-year decline in PPI is likely to narrow further.
**Core CPI Growth Extends for Sixth Straight Month** The data revealed that CPI turned from a 0.3% year-on-year drop in September to a 0.2% increase in October. Food prices fell 2.9%, narrowing the decline by 1.5 percentage points from the previous month, dragging CPI down by approximately 0.54 percentage points, while energy prices dropped 2.4%.
Dong Lijuan, Chief Statistician at the Urban Department of the National Bureau of Statistics, noted that food and energy prices remained low in October, but their year-on-year declines narrowed. Meanwhile, core CPI rose 1.2% year-on-year, marking the sixth consecutive month of expansion and hitting its highest level since March 2024.
Dong attributed the core CPI growth to two factors: a gradual rebound in service prices since March, which rose 0.8% in October (up 0.2 percentage points from September), and a 2.0% increase in industrial goods prices excluding energy—also expanding for the sixth straight month. Notably, gold and platinum jewelry prices surged 50.3% and 46.1%, respectively. Policy measures to boost domestic demand continued to take effect, with prices for household appliances, recreational durable goods, and daily necessities rising between 2.4% and 5.0%, while the decline in fuel-powered car prices narrowed to 2.3%.
Pang Ming, a senior researcher at the National Finance and Development Laboratory, stated that the sustained rise in core CPI reflects robust recovery in domestic consumption, particularly in services, reinforcing the overall price stability.
**CPI Monthly Growth Slightly Exceeds Seasonal Norms** Dong pointed out that CPI rose 0.2% month-on-month in October, up 0.1 percentage points from September and slightly above seasonal levels.
Breaking it down, service prices reversed from a 0.3% drop in September to a 0.2% increase, exceeding seasonal levels by 0.2 percentage points. Hotel accommodation, airfare, and travel prices rose 8.6%, 4.5%, and 2.5%, respectively—all above seasonal trends—while medical service prices increased 0.5%.
Food prices rose 0.3%, against a seasonal norm of a 0.1% decline, also outperforming expectations. Pang noted that October’s price data demonstrated broad-based improvement, signaling accumulating momentum in consumption-driven price trends. Over the next quarter, CPI is expected to maintain moderate year-on-year growth, with core CPI likely to show clearer upward momentum as the primary driver of overall price increases.
**Anti-Overcapacity Policies Support Industrial Price Recovery** In October, PPI shifted from flat in September to a 0.1% month-on-month increase—the first rise this year—while the year-on-year decline narrowed by 0.2 percentage points to 2.1%, continuing a three-month trend of contraction easing.
Dong explained that month-on-month, improved supply-demand dynamics lifted prices in certain sectors. For instance, coal mining and washing prices rose 1.6%, coal processing prices increased 0.8%, and photovoltaic equipment and component manufacturing prices climbed 0.6%—all extending gains for over two months. Prices for cement, computer manufacturing, lithium-ion batteries, and integrated circuits also turned from declines to increases.
Year-on-year, capacity management in key industries helped narrow price declines. Tighter capacity audits and safety supervision, coupled with winter stockpiling and rising electricity demand, reduced the coal mining and washing price drop by 1.2 percentage points. Optimized market competition and the phase-out of outdated capacity narrowed declines in photovoltaic equipment, battery manufacturing, and auto manufacturing by 1.4, 1.3, and 0.7 percentage points, respectively.
Additionally, accelerated modernization of industrial systems and orderly consumption potential release drove price increases in related sectors. For example, innovation-driven industrial upgrades boosted prices in nonferrous metal smelting (up 6.8%), electronic materials (up 2.3%), microwave communication equipment (up 1.8%), shipbuilding (up 0.9%), waste recycling (up 0.7%), and aircraft manufacturing (up 0.5%).
Pang emphasized that as demand recovery bolsters orders, industrial prices will find further support. With competition improving in oversupplied sectors, PPI’s year-on-year decline should continue narrowing, while month-on-month trends may stabilize weakly.
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