China Producer Prices Change

China's producer prices fell by 2.9% year-on-year in October 2024, following a 2.8% drop in the previous month and going beyond market expectations of a 2.5% decline. This marked the 25th consecutive month of producer deflation and the sharpest contraction since November 2023, reflecting persistently weak domestic demand despite ongoing efforts by Beijing to break the trend. The cost of production materials continued to decrease (-3.3%, -3.3% in September), dragged by further declines in mining (-5.1% vs. -2.5%), raw materials (-4.0% vs. -3.2%), and processing (-2.9% vs. -3.3%). Meanwhile, consumer goods prices remained subdued (-1.6% vs. -1.3%), with notable weakness in food (-1.6% vs -1.6%), clothing (-0.4% vs. -0.3%), and durable goods (-3.1% vs. -2.1%), although daily-use goods edged up slightly (0.1% vs. -0.3%). On a monthly basis, producer prices slipped by 0.1%, after a 0.6% decline in September. For the first ten months of the year, producer prices shrank by 2.1%.