China's producer prices rose 5.7% in October, the fastest pace since June 2022 and above the 5.3% forecast. The increase marked the third straight month of acceleration, driven by sharp rises in mining and raw materials costs. Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, attributed the surge to strong external demand.
Consumer inflation told a different story. Prices rose just 0.7% in October, down from 0.9% in September and below the expected 0.8%. Core inflation, which excludes food and energy, fell to 0.8% from 1% the prior month.
Gasoline prices powered the consumer gain, but food prices fell more steeply than anticipated, according to Dong Lijuan, chief statistician of the urban division at China's National Bureau of Statistics. The slowdown in consumer inflation reflects weak domestic demand, Zhang said. The property market has not shown clear signs of stabilization, and this weakness is restraining household consumer confidence and local government revenue, he explained.
The mainland Chinese CSI 300 index rose 0.56% following the data release.