China’s producer inflation eases in July, falls below expectations

China’s producer price index cooled off in July after surging to its highest level since mid-2022, coming in below what markets had penciled in. The pullback from June’s 4.1% year-over-year reading suggests the inflationary rebound that broke a historic deflationary streak may already be losing steam. The National Bureau of Statistics released the data on August 9, with consensus estimates having clustered around 3.8% to 3.9% year-over-year growth. The actual figure undershot even those already-tempered forecasts, driven by a decline in month-over-month producer inflation. From deflation to whiplash China’s PPI spent 41 consecutive months in negative territory, a deflationary grind that began in late 2022 and persisted through early 2026. That changed in March 2026, when the PPI finally flipped positive at 0.5% year-over-year. The turnaround accelerated quickly: May hit 3.9%, and June printed at 4.1%, the highest reading since July 2022. The rally was powered almost entirely by upstream costs. Means-of-production prices jumped 5.5% year-over-year in June. Mining sector prices surged 16.5%, and raw materials climbed 8.6%. Meanwhile, consumer goods prices fell 0.9% year-over-year as ...