China's July price data shows consumer inflation remained moderate, with a sharp decline in gasoline prices dragging down the year-on-year increase, while service prices and consumer electronics prices provided key support. On the production side, prices fell faster month-on-month due to a combination of imported cost pressures and seasonal factors, causing the year-on-year growth rate to decline for a second consecutive month.
On Saturday, the National Bureau of Statistics released the following data:
The July CPI rose 0.5% year-on-year, a 0.5 percentage point drop from the previous month, mainly due to a significant narrowing of the year-on-year increase in gasoline prices (by 16 percentage points). Simultaneously, summer travel demand drove a significant month-on-month rise in service prices such as tourism and accommodation. Increased demand for AI-driven consumer electronics led to notable price increases for related products. The July CPI fell 0.1% month-on-month, narrowing the decline by 0.2 percentage points from the previous month.
On the production side, the PPI rose 3.5% year-on-year, a 0.6 percentage point decrease from the previous month. Fluctuations in international commodity prices were transmitted to domestic upstream industries like oil and non-ferrous metals. Combined with weather factors such as high temperatures and typhoons suppressing demand for building materials and construction, the PPI month-on-month decline widened by 0.4 percentage points to 0.7%.
Dong Lijuan, Chief Statistician of the Urban Department at the National Bureau of Statistics, interpreted the July 2026 CPI and PPI data:
In July, influenced by international factors, the Consumer Price Index (CPI) fell 0.1% month-on-month and rose 0.5% year-on-year. The core CPI, excluding food and energy prices, rose 0.3% month-on-month and 0.9% year-on-year, indicating overall moderate inflation. While demand in some domestic industries increased, due to imported and seasonal factors, the Producer Price Index (PPI) fell 0.7% month-on-month and rose 3.5% year-on-year, a 0.6 percentage point decrease in the growth rate from the previous month.
I. CPI Month-on-Month Decline Narrows, Year-on-Year Rise Remains Moderate
On a month-on-month basis, the national CPI fell 0.1%, a 0.2 percentage point narrowing of the decline from the previous month.
Fluctuations in international market prices drove domestic gasoline prices down 10.7%, a 5.8 percentage point expansion of the decline from the previous month, impacting the month-on-month CPI change by approximately -0.35 percentage points.
Food prices remained flat month-on-month, 0.6 percentage points lower than the seasonal norm. Within food, fresh vegetable prices rose 1.3%, and egg prices fell 2.1%, both significantly below seasonal levels. With ample market supply of seasonal fruits, fresh fruit prices fell 3.8%, impacting the month-on-month CPI change by approximately -0.07 percentage points. The effects of comprehensive regulation policies on pig production capacity, combined with extreme weather like high temperatures and heavy rain in some regions raising transportation costs, caused pork prices to rise 4.1% month-on-month, reversing the 0.8% decline in the previous month and impacting the month-on-month CPI change by approximately +0.07 percentage points.
AI is driving the iteration and upgrade of consumer electronics, increasing demand and prices for related products. Prices for tablets, computers, and mobile phones rose by 11.3%, 5.5%, and 1.0%, respectively, collectively impacting the month-on-month CPI change by approximately +0.03 percentage points.
Service prices turned from flat in the previous month to a rise of 0.4% month-on-month, impacting the month-on-month CPI change by approximately +0.21 percentage points. Within services, summer travel demand increased, pushing up prices for travel agency fees, hotel accommodation, airfares, and vehicle rental by 7.2%, 6.5%, 4.2%, and 3.6%, respectively, collectively impacting the month-on-month CPI change by approximately +0.10 percentage points. Continued policy-driven price adjustments in some regions led to a 1.1% increase in medical service prices, impacting the month-on-month CPI change by approximately +0.07 percentage points.
On a year-on-year basis, the national CPI rose 0.5%, maintaining moderate inflation. The 0.5 percentage point slowdown in the year-on-year CPI growth rate from the previous month was mainly due to the narrowing increase in gasoline prices. Gasoline prices rose 1.0%, a 16.0 percentage point decline in the growth rate from the previous month, reducing its upward pull on the CPI by approximately 0.45 percentage points compared to the previous month and driving the energy price growth rate down to 0.6%.
Industrial consumer goods prices excluding energy rose 1.5% year-on-year, a 0.2 percentage point decline from the previous month, impacting the year-on-year CPI change by approximately +0.37 percentage points. Within this category, prices for gold jewelry, personal care items, and household appliances rose by 24.6%, 1.7%, and 0.2%, respectively, with all growth rates declining, collectively impacting the year-on-year CPI change by approximately +0.13 percentage points. Prices for computers, tablets, and mobile phones rose by 17.4%, 17.2%, and 8.5%, respectively, with all growth rates expanding, collectively impacting the year-on-year CPI change by approximately +0.14 percentage points.
Service prices rose 0.7% year-on-year, a 0.1 percentage point decline from the previous month, impacting the year-on-year CPI change by approximately +0.36 percentage points. Within services, medical service prices rose 4.3%, a 0.9 percentage point expansion from the previous month, impacting the year-on-year CPI change by approximately +0.28 percentage points. Prices for domestic services, dining out, and education services rose by 1.3%, 1.0%, and 0.6%, respectively, with overall stable growth.
Food prices fell 1.5% year-on-year, a 0.1 percentage point narrowing of the decline from the previous month, impacting the year-on-year CPI change by approximately -0.25 percentage points. Within food, pork prices fell 13.3%, a 2.6 percentage point narrowing of the decline from the previous month, impacting the year-on-year CPI change by approximately -0.25 percentage points. Prices for fresh vegetables, fresh fruits, grain, cooking oil, and milk fell between 0.3% and 1.5%. Egg prices rose 17.8%, a 2.2 percentage point slowdown from the previous month. Prices for mutton, beef, and poultry rose between 1.6% and 6.2%.
II. PPI Falls Month-on-Month, Year-on-Year Increase Slows
On a month-on-month basis, the national PPI fell 0.7%, a 0.4 percentage point expansion of the decline from the previous month.
The main characteristics of the July PPI month-on-month movement were: First, imported cost factors drove prices down in related domestic industries. Prices for oil and gas extraction, refined petroleum product manufacturing, and organic chemical raw material manufacturing fell by 11.8%, 8.4%, and 4.2%, respectively. Prices for non-ferrous metal mining and dressing, and non-ferrous metal smelting and rolling processing fell by 2.1% and 1.7%, respectively. These five industries collectively impacted the month-on-month PPI change by approximately -0.65 percentage points.
Second, seasonal factors caused price declines in some industries. In July, frequent high temperatures, rain, and typhoons slowed construction project progress, leading to price declines of 0.8% and 0.5% in ferrous metal smelting and rolling processing, and non-metallic mineral products, respectively. Increased hydropower and wind power generation led to price declines of 10.3% and 3.9%, respectively. These four industries collectively impacted the month-on-month PPI change by approximately -0.11 percentage points.
Third, industrial transformation, upgrading, and the expansion of quality consumption drove demand and price increases in some industries. New growth drivers strengthened, with booming development in AI, high-end equipment, and new materials sectors. Prices for intelligent unmanned aerial vehicle manufacturing, carbon new materials, and shipbuilding and related device manufacturing rose by 2.5%, 0.4%, and 0.3%, respectively. Quality-oriented consumption grew rapidly, with prices for smart home consumer devices and skincare cosmetics manufacturing rising by 3.4% and 0.7%.
On a year-on-year basis, the national PPI rose 3.5%, a 0.6 percentage point decrease from the previous month.
By industry, among the main industries with rising prices, oil and gas extraction, oil processing, coking, and nuclear fuel processing, and chemical raw materials and chemical products manufacturing rose by 3.2%, 8.2%, and 9.1%, respectively. Non-ferrous metal mining and dressing, and non-ferrous metal smelting and rolling processing rose by 22.6% and 20.2%, respectively. Ferrous metal smelting and rolling processing rose by 2.7%. Growth rates for all these industries declined compared to the previous month. These six industries collectively impacted the year-on-year PPI change by approximately +2.55 percentage points. Coal mining and washing rose by 27.1%, electrical machinery and equipment manufacturing rose by 5.7%, and computer, communication, and other electronic equipment manufacturing rose by 4.4%, with growth rates for all these industries expanding compared to the previous month. These three industries collectively impacted the year-on-year PPI change by approximately +1.53 percentage points. The upward pull from these nine industries on the PPI was 0.56 percentage points less than in the previous month.
The five industries exerting the largest downward pull on prices were: electricity and heat production and supply, automobile manufacturing, non-metallic mineral products, pharmaceutical manufacturing, and beverage, alcohol, and refined tea manufacturing. Their price declines ranged from 2.3% to 5.7%, collectively impacting the year-on-year PPI change by approximately -0.76 percentage points, a 0.05 percentage point reduction from the previous month.
CPI Year-on-Year Increase Narrows, Month-on-Month Decline Also Narrows
In July 2026, the national consumer price index rose 0.5% year-on-year. Urban areas rose 0.5%, and rural areas rose 0.4%. Food prices fell 1.5%, and non-food prices rose 0.9%. Consumer goods prices rose 0.2%, and service prices rose 0.7%. On average from January to July, the national consumer price index rose 0.9% compared to the same period last year.
In July, the national consumer price index fell 0.1% month-on-month. Urban areas fell 0.1%, and rural areas fell 0.2%. Food prices were flat, and non-food prices fell 0.1%. Consumer goods prices fell 0.6%, and service prices rose 0.4%.
I. Year-on-Year Price Changes for Various Goods and Services
In July, the price index for food, tobacco, alcohol, and dining out fell 0.8% year-on-year, impacting the CPI by approximately -0.22 percentage points. Within food, meat prices fell 6.0%, impacting the CPI by approximately -0.25 percentage points, with pork prices falling 13.3%. Milk prices fell 1.5%, impacting the CPI by approximately -0.02 percentage points. Fresh fruit prices fell 1.1%, impacting the CPI by approximately -0.02 percentage points. Egg prices rose 14.4%, impacting the CPI by approximately +0.07 percentage points.
Among the other seven major categories, prices rose in six and fell in one year-on-year. Other supplies and services, and medical care prices rose by 5.8% and 2.9%, respectively. Clothing, and education, culture, and entertainment prices rose by 1.4% and 1.3%, respectively. Household goods and services, and transportation and communication prices rose by 0.8% and 0.4%, respectively. Housing prices fell 0.3%.
II. Month-on-Month Price Changes for Various Goods and Services
In July, the price index for food, tobacco, alcohol, and dining out was flat month-on-month. Within food, meat prices rose 1.9%, impacting the CPI by approximately +0.07 percentage points, with pork prices rising 4.1%. Fresh vegetable prices rose 1.3%, impacting the CPI by approximately +0.02 percentage points. Fresh fruit prices fell 3.8%, impacting the CPI by approximately -0.07 percentage points. Egg prices fell 1.7%, impacting the CPI by approximately -0.01 percentage points.
Among the other seven major categories, prices rose in three, were flat in two, and fell in two month-on-month. Education, culture, and entertainment, medical care, and household goods and services prices rose by 1.0%, 0.8%, and 0.4%, respectively. Housing, and other supplies and services prices were flat. Transportation and communication, and clothing prices fell by 2.2% and 0.4%, respectively.
PPI Year-on-Year Increase Narrows to 3.5%, Month-on-Month Decline Widens
In July 2026, the national producer price index for industrial products rose 3.5% year-on-year and fell 0.7% month-on-month. The purchasing price index for industrial producers rose 5.5% year-on-year and fell 1.0% month-on-month. On average from January to July, the producer price index for industrial products rose 1.8% compared to the same period last year, and the purchasing price index for industrial producers rose 2.8%.
I. Year-on-Year Changes in Producer Prices for Industrial Products
In July, among the producer prices for industrial products, means of production prices rose 4.8% year-on-year, impacting the overall producer price index by approximately +3.72 percentage points. Within this, extraction industry prices rose 16.4%, raw material industry prices rose 6.1%, and processing industry prices rose 3.1%. Means of livelihood prices fell 0.8%, impacting the overall producer price index by approximately -0.17 percentage points. Within this, food prices fell 2.1%, clothing prices fell 1.1%, general daily use items prices fell 1.0%, and durable consumer goods prices rose 0.4%.
Among the purchasing prices for industrial producers, non-ferrous metal materials and wire prices rose 19.0%, fuel and power, and chemical raw material prices both rose 9.3%, textile raw material prices rose 3.2%, and ferrous metal material prices rose 1.4%. Building materials and non-metallic mineral prices fell 4.1%, and agricultural by-product prices fell 0.8%.
II. Month-on-Month Changes in Producer Prices for Industrial Products
In July, among the producer prices for industrial products, means of production prices fell 0.9% month-on-month, impacting the overall producer price index by approximately -0.70 percentage points. Within this, extraction industry prices fell 0.2%, raw material industry prices fell 2.4%, and processing industry prices fell 0.1%. Means of livelihood prices fell 0.1%, impacting the overall producer price index by approximately -0.01 percentage points. Within this, food and durable consumer goods prices were flat, clothing prices fell 0.3%, and general daily use items prices fell 0.2%.
Among the purchasing prices for industrial producers, fuel and power, and chemical raw material prices both fell 2.6%, non-ferrous metal materials and wire prices fell 1.4%, ferrous metal materials and textile raw material prices both fell 0.2%, and building materials and non-metallic mineral prices fell 0.1%. Agricultural by-product prices rose 0.5%.
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