Official data released on June 10th indicates consumer price inflation remained generally stable in May, while producer prices continued to rise. The overall consumer market operated steadily, with the Consumer Price Index (CPI) decreasing by 0.1% month-on-month and increasing by 1.2% year-on-year. The core CPI, which excludes food and energy, rose by 1.1% year-on-year. Influenced by factors including increased demand in certain domestic sectors and the transmission of international commodity price fluctuations, the Producer Price Index (PPI) increased by 0.5% month-on-month and 3.9% year-on-year.
Consumer Price Index Remains Largely Unchanged
On a month-on-month basis, the national CPI fell by 0.1%, a shift from the 0.3% increase recorded in the previous month, primarily influenced by changes in energy and service prices. Due to the impact of international oil price transmission, domestic gasoline prices shifted from a 12.6% increase last month to a 0.3% decrease, leading energy prices to change from a 5.7% increase to a 0.1% decrease. This shifted the impact on the month-on-month CPI from an upward pull of 0.39 percentage points last month to a downward pull of 0.01 percentage points this month. Following the seasonal decline in travel after the May Day holiday, service prices shifted from a 0.5% increase to a 0.1% decrease, changing their impact on the month-on-month CPI from an upward pull of 0.22 percentage points to a downward pull of 0.03 percentage points. Within this category, vehicle rental and airfare prices shifted from increases of 8.6% and 29.2% last month to decreases of 6.8% and 6.3% respectively, together affecting the month-on-month CPI by a decrease of approximately 0.04 percentage points. The launch of new summer clothing lines drove apparel prices up by 0.6%, while strong demand related to AI pushed up prices for mobile phones and tablet computers by 1.6% and 1.1% respectively. These three items together contributed to a month-on-month CPI increase of about 0.05 percentage points. Food prices decreased by 0.4%, with the rate of decline narrowing by 1.2 percentage points compared to the previous month, affecting the month-on-month CPI by a decrease of about 0.07 percentage points. Among food items, the ample supply of seasonal vegetables led to a 3.6% drop in fresh vegetable prices, impacting the month-on-month CPI by a decrease of roughly 0.06 percentage points. Ample pork supply led to a price decrease of 1.6%, with the rate of decline narrowing by 4.1 percentage points from the previous month, affecting the month-on-month CPI by a decrease of about 0.03 percentage points. Factors including a temporary tight supply, reduced egg-laying rates due to summer heat, and concentrated pre-holiday stocking for the Dragon Boat Festival contributed to a 6.1% increase in egg prices, affecting the month-on-month CPI by an increase of approximately 0.03 percentage points.
On a year-on-year basis, the national CPI increased by 1.2%, with the rate of increase unchanged from the previous month. Within this, prices of industrial consumer goods rose by 3.9%, accelerating by 0.4 percentage points from the previous month, contributing to a year-on-year CPI increase of about 1.18 percentage points. Among industrial consumer goods, due to a lower comparison base from the same period last year, gasoline price increases continued to widen to 23.5%, contributing to a year-on-year CPI increase of about 0.66 percentage points. The increase in gold jewelry prices continued to slow to 39.0%, contributing to a year-on-year CPI increase of about 0.17 percentage points. Prices for household appliances and clothing rose by 3.4% and 1.5% respectively, together contributing to a year-on-year CPI increase of about 0.12 percentage points. Service prices increased by 0.8%, with the rate of increase slowing by 0.1 percentage point from the previous month, contributing to a year-on-year CPI increase of about 0.40 percentage points. Among services, travel service prices rose by 2.8%, with the rate of increase slowing by 0.9 percentage points from the previous month, while price increases for other services remained generally stable. Food prices decreased by 1.7%, with the rate of decline widening by 0.1 percentage point from the previous month, contributing to a year-on-year CPI decrease of about 0.30 percentage points. Among food items, pork prices fell by 16.1%, with the rate of decline widening by 0.9 percentage points from the previous month, contributing to a year-on-year CPI decrease of about 0.31 percentage points. Fresh fruit prices decreased by 2.2%, contributing to a year-on-year CPI decrease of about 0.04 percentage points. Prices for eggs, mutton, beef, poultry, aquatic products, and fresh vegetables all increased, with gains ranging between 0.6% and 8.4%, together contributing to a year-on-year CPI increase of about 0.13 percentage points.
Sustained Increase in Producer Prices
On a month-on-month basis, the national PPI increased by 0.5%, with the rate of increase slowing by 1.2 percentage points from the previous month. Key characteristics of the month-on-month PPI movement included: First, industrial structure optimization and upgrading drove price increases in some sectors. The ongoing renewal of manufacturing equipment pushed prices in the smelting and pressing of ferrous metals industry up by 1.2% month-on-month. Accelerated electrification, deep integration of artificial intelligence across various fields, and growing computing power demand contributed to price increases in non-ferrous metals, electrical machinery, and computer-related industries. Prices in the smelting and pressing of non-ferrous metals industry rose by 1.1%, with tin smelting and copper smelting prices increasing by 4.8% and 3.1% respectively. Prices in the computer, communication, and other electronic equipment manufacturing industry increased by 0.6%, with integrated circuit packaging and testing series, and external storage devices and components prices rising by 2.9% and 1.9% respectively. Prices in the electrical machinery and equipment manufacturing industry increased by 0.5%, with optical fiber manufacturing and wire and cable manufacturing prices rising by 8.0% and 1.2% respectively. Second, seasonal demand increases drove price gains in some sectors. Increased demand for coal in preparation for peak summer consumption and for non-power uses led prices in the coal mining and washing industry to rise by 3.2% month-on-month. As temperatures gradually rose in May, prices for household air conditioner manufacturing and household refrigeration appliance manufacturing increased by 0.9% and 0.3% respectively, while power supply prices rose by 0.4%. Third, the transmission of international crude oil price fluctuations caused prices in related domestic industries to shift from increase to decrease or see slower growth. Month-on-month prices for petroleum extraction shifted from a 24.1% increase last month to a 1.8% decrease. Prices for refined petroleum product manufacturing shifted from a 19.0% increase to a 0.3% decrease. Prices in the raw chemical materials and chemical products manufacturing, chemical fiber manufacturing, and rubber and plastic products industries increased by 2.0%, 1.5%, and 1.5% respectively, with the rates of increase slowing by 6.3, 4.1, and 0.2 percentage points respectively from the previous month.
On a year-on-year basis, the national PPI increased by 3.9%, with the rate of increase accelerating by 1.1 percentage points from the previous month. By industry, among those with price increases, the mining and processing of non-ferrous metal ores industry rose by 36.5% year-on-year, the smelting and pressing of non-ferrous metals industry increased by 24.0%, the coal mining and washing industry rose by 10.0%, the electrical machinery and equipment manufacturing industry increased by 4.5%, the computer, communication, and other electronic equipment manufacturing industry rose by 2.1%, and the smelting and pressing of ferrous metals industry increased by 1.0%. These six industries together contributed to a year-on-year PPI increase of about 2.56 percentage points, with their upward pull effect increasing by 0.51 percentage points from the previous month. The extraction of petroleum and natural gas, processing of petroleum, coal and other fuels, and raw chemical materials and chemical products manufacturing industries increased by 35.7%, 18.4%, and 12.7% respectively, together contributing to a year-on-year PPI increase of about 1.96 percentage points, with their upward pull effect increasing by 0.46 percentage points from the previous month. Among industries with price declines, the non-metallic mineral products industry fell by 5.1%, the production and supply of power and heat industry decreased by 4.4%, the automobile manufacturing industry fell by 2.0%, and the processing of agricultural and sideline products industry decreased by 1.4%. These four industries together contributed to a year-on-year PPI decrease of about 0.75 percentage points, with their downward pull effect increasing by 0.01 percentage points from the previous month.
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