Overview
- China’s inflation gauges, released Monday by the National Bureau of Statistics, showed producer prices up 2.8% year over year and consumer prices up 1.2%, topping forecasts.
- The increase ends a 41-month stretch of producer-price deflation and marks the strongest factory reading since July 2022.
- Analysts tie the surge to higher global oil and commodity costs linked to the Iran conflict, a cost push rather than a burst of domestic demand.
- Core consumer inflation reached about 1.2%, a sign that pressures are spreading beyond fuel, even as April PMIs showed services and construction shrinking and manufacturing only slightly expanding.
- Higher input costs are squeezing manufacturers and limiting scope for People’s Bank of China easing, with households feeling the pinch from pricier gasoline and rising airline fuel surcharges.