More evidence that parts of the Chinese economy are slowing as sluggish demand takes hold.
Producer price inflation in China recorded the slowest rise in five months in September, according to official figures out yesterday.
This adds to the growing signs that economic activity has been slowing in recent months in China.
Car sales have now fallen for three months in a row with an 11% plus slide in September.
Commodity imports such as iron ore, copper, and oil remain solid, but retail sales are reportedly growing modestly (we will find out more when the September monthly and quarterly economic data is out on Friday).
That saw the central bank – the People’s Bank of China (PBOC) – announce another cut to banks’ reserve requirement ratio (RRR) just over a week ago – the fourth reduction this year.
The producer price index published by the National Bureau of Statistics slowed to a year-on-year rise of 3.6% last month, a drop of 0.48% to the slowest pace since April. It was running around 6.9% at the end of 2017, so the deceleration has been marked.
The bureau blamed high prices from a year ago for much of the dip, but the latest reading marks the third straight month of slowing producer price growth in China, although there was a 0.6% rise month on month thanks to higher oil and energy prices. There was a 0.4% rise in the PPI in August from July.
Consumer inflation pushed to the highest level in seven months, however, hitting an annual rate of 2.5% in September. That is still below the 3% official target for this year.
Much of that came from a jump in fresh vegetable prices that helped push food inflation up 3.6% while pork prices fell 2.4% (pork is the most important part of the CPI).