Consumer prices in China fell more than expected in September

Consumer prices in China fell more than expected in September, while deflation in producer prices continued, highlighting the impact of slowing domestic demand and trade concerns on consumer and business sentiment.

The CPI fell by 0.3% in September compared to a year ago, Data from the National Bureau of Statistics showed On Wednesday, the decline was sharper than economists’ expectations for a 0.2% decline, although it was down from the 0.4% decline in August.

Prices rose 0.1% on a monthly basis, a smaller-than-expected rebound compared to economists’ expectations for a 0.2% increase.

The core CPI, which excludes volatile food and energy prices, rose 1.0% from a year earlier, the highest level since February 2024, according to Wind Information data.

Despite the “positive sign” of the improvement in the core CPI, “trade tension has returned and uncertainty in the growth outlook has increased, which is negative for the demand recovery,” said Zhu Zhang, president and chief economist at Pinpoint Asset Management.

“It is too early to conclude that deflationary pressures are fading at this stage,” Zhang added.

China’s producer price index fell by 2.3% compared to last year, in line with economists’ expectations. Official data Show. However, deflation eased for a second month, with price declines narrowing from 2.9% in August and 3.6% in July.

The decline in producer prices has continued for nearly three years, hurting the profitability of manufacturers who have had to endure waning consumer confidence and production disruptions caused by US trade policies.

Weak consumer demand has weighed on the Chinese economy, which is suffering from a long-term decline in the housing market, while US tariffs have pressured exports.

While China’s total exports have increased this year, shipments to the United States have seen double-digit declines since April.