Still, inflation remained well below the Chinese government’s target of around 3 percent for 2018.
The politically sensitive food inflation picked up to a five-month high of 1.7 percent in August from 0.5 percent in the prior month, as prices rose at a faster pace for both fresh fruits (5.5 percent vs 0.4 percent in July) and fresh vegetables (4.3 percent vs 3.8 percent). In addition, cost of eggs continued to increase firmly (10.2 percent vs 11.7 percent), as well as poultry prices (5.5 percent vs 6.6 percent); while pork price deflation eased further (-4.9 percent vs -9.6 percent) despite concerns on a series of African swine fever outbreaks. Edible oil costs also dropped (-0.6 percent vs -0.7 percent).
Additional upward pressure came from: clothing (1.3 percent vs 1.2 percent); rent, fuel & utilities (2.5 percent vs 2.4 percent); and education, culture & recreation (2.6 percent vs 2.3 percent). Meanwhile, inflation was unchanged for both household goods & services (at 1.6 percent) and other goods & services (at 1.2 percent), but eased for transport & communication (2.7 percent vs 3 percent) and healthcare (4.3 percent vs 4.6 percent).
Annual core inflation, which excludes volatile items such as food and energy, picked up to 2 percent in August from 1.9 percent in the previous month.
On a monthly basis, consumer prices went up 0.7 percent in August, following a 0.3 percent rise in July and beating market expectations of 0.5 percent. It was the highest monthly rate since February.
Meanwhile, the producer price index increased by 4.1 percent from a year earlier in August, after a 4.6 percent rise in the previous month and compared to market expectations of 4 percent. Prices of means of production went up 5.2 percent (vs 6 percent in July), namely extraction (12.1 percent vs 13.4 percent), raw materials (7.8 percent vs 9 percent) and processing (3.5 percent vs 4.1 percent). Meanwhile, consumer goods inflation edged up to 0.7 percent from 0.6 percent, led by clothing (1.1 percent vs 0.7 percent), daily use goods (1.2 percent vs 1.1 percent) and consumer durable goods (0.2 percent vs -0.2 percent) while inflation was unchanged for food production (at 0.7 percent). On a monthly basis, producer prices went up 0.4 percent.