China's consumer prices rise for third month, factory deflation persists

People walk along Nanjing Pedestrian Road, a main shopping area, ahead of the National Day holiday, in Shanghai, China, Sept. 26, 2023. Photo by Reuters

The closely watched numbers follow official surveys showing cooling factory and services activity, as concerns rise about economic growth losing momentum, weighed down by a protracted housing downturn, boosting the case for more policy support.

The consumer price index (CPI) edged up 0.3% in April from a year earlier, accelerating from a rise of 0.1% in March, data from the National Bureau of Statistics (NBS) showed on Saturday. That was above a rise of 0.2% forecast in a Reuters poll.

CPI rose 0.1% from the previous month, reversing a drop of 1% in March and above a decline of 0.1% predicted by economists.

The producer price index (PPI) dropped 2.5% in April from a year earlier, easing from a slide of 2.8% the previous month and compared with a forecast decline of 2.3%.

Domestic housing demand remains soft, with average daily home sales having slumped 47% over the Labor Day holiday from 2023 levels, while jobless fears linger, notably among young people.

Core inflation, excluding volatile food and fuel prices, grew 0.7% in April, up from 0.6% in March.

China will use policy tools, such as banks' reserve requirement ratio (RRR) and interest rates, in a flexible way to step up support for the economy, the Politburo, a top-decision making body of the ruling Communist Party, said in late April.