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July 8, 2020, 11:29 p.m. EDT

China's industrial deflation slowed in June

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By MarketWatch

BEIJING--The decline in China's factory-gate prices moderated in June as global commodities prices recovered and the domestic manufacturing sector returned to normal, driving demand for industrial goods, the nation's statistics bureau said Thursday.

The producer-price index dropped 3.0% in June from a year earlier, improving from a 3.7% decline in May, the National Bureau of Statistics said. Economists polled by The Wall Street Journal expected the industrial-price gauge to drop 3.2%.

Prices of products in oil-related industries rebounded in June from the previous month, thanks to recovering global crude prices, Dong Lijuan, a senior statistician at the NBS, said in a separate statement.

China's consumer inflation picked up to 2.5% in June from a year earlier, compared with 2.4% in May, the slowest pace in 14 months. The economists polled forecast inflation at 2.6%.

Food prices rose 11.1% last month, up from a 10.6% increase in May. Non-food prices rose 0.3%, compared with May's 0.4% increase.

Due to the flood in southern China and new coronavirus infections in Beijing, there was a vegetable supply shortage in some parts of the country, pushing up prices of food, Ms. Dong said.

China's pork-price inflation continued to ease in June. Pork prices rose 81.6%, slowing slightly from an 81.7% increase in May. Pork prices boosted headline CPI by about 2.05 percentage points.

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