China's core CPI rose to 0.9% in August, while PPI decreased by 2.9% year-on-year

China's core CPI in August has expanded for the fourth consecutive month year-on-year.

National Bureau of Statistics: With the continuous effectiveness of policies to expand domestic demand and promote consumption, the year-on-year increase in core CPI in August has expanded for the fourth consecutive month. In August, the core CPI excluding food and energy prices rose by 0.9% year-on-year, an increase of 0.1 percentage points compared to the previous month.

National Bureau of Statistics: The year-on-year CPI in August shifted from flat to decline, mainly due to the high comparison base from the same period last year combined with this month's food price increase being lower than seasonal levels.

China's August PPI year-on-year -2.9%, previous value -3.6%.

The National Bureau of Statistics stated that the PPI month-on-month ended a continuous decline for eight months, changing from a 0.2% decrease last month to flat. The PPI decreased by 2.9% year-on-year, with the decline narrowing by 0.7 percentage points compared to the previous month, marking the first narrowing since March of this year.

Core CPI continues to rebound in August 2025, PPI year-on-year decline narrows—Interpretation of August 2025 CPI and PPI data by Dong Lijuan, Chief Statistician of the Urban Division of the National Bureau of Statistics

In August, the overall operation of the consumer market was stable, with the Consumer Price Index (CPI) remaining flat month-on-month and decreasing by 0.4% year-on-year. The core CPI excluding food and energy prices rose by 0.9% year-on-year, with the increase expanding for the fourth consecutive month. The domestic market competition order continues to optimize, and the supply-demand relationship in some industries has improved. The Producer Price Index (PPI) changed from a 0.2% decrease last month to flat; year-on-year, it decreased by 2.9%, with the decline narrowing by 0.7 percentage points compared to the previous month.

1. Core CPI continues to rebound

The year-on-year CPI shifted from flat to decline, mainly due to the high comparison base from the same period last year combined with this month's food price increase being lower than seasonal levels. From the tail effect, the price changes from last year had a tail effect on this month's year-on-year CPI of about -0.9 percentage points, with the downward impact expanding by 0.4 percentage points compared to the previous month; from new price increases, this month's CPI remained flat month-on-month, about 0.3 percentage points lower than seasonal levels. The combination of these two factors led to a decline in the year-on-year CPI. By category, the main reason was the low food prices. This month, food prices rose by 0.5% month-on-month, with the increase being about 1.1 percentage points lower than seasonal levels, among which the price changes of pork, eggs, and fresh fruits were all weaker than seasonal levels. Food prices decreased by 4.3% year-on-year, with the decline expanding by 2.7 percentage points compared to the previous month, increasing the downward impact on the year-on-year CPI by about 0.51 percentage points, higher than the year-on-year CPI decline. Among them, the prices of pork, fresh vegetables, and eggs decreased by 16.1%, 15.2%, and 14.2% year-on-year, with the declines expanding by 6.6, 7.6, and 1.3 percentage points respectively compared to the previous month. The price of fresh fruits shifted from an increase of 2.8% last month to a decrease of 3.7% year-on-year, with the downward impact of the above four items on the year-on-year CPI increasing by about 0.47 percentage points compared to the previous month. Non-food prices rose by 0.5%, with the increase expanding for the third consecutive month, impacting the year-on-year CPI increase by about 0.43 percentage points.

With the continuous effectiveness of policies to expand domestic demand and promote consumption, the year-on-year increase in core CPI has expanded for the fourth consecutive month. This month, the core CPI excluding food and energy prices rose by 0.9% year-on-year, with the increase expanding by 0.1 percentage points compared to the previous month. Among them, the prices of industrial consumer goods excluding energy rose by 1.5% year-on-year, with the increase expanding by 0.3 percentage points compared to the previous month In industrial consumer goods, the prices of gold jewelry and platinum jewelry increased by 36.7% and 29.8% year-on-year, respectively, collectively impacting the CPI year-on-year increase by approximately 0.22 percentage points; the price increases for household appliances and durable consumer goods for entertainment expanded to 4.6% and 2.4% year-on-year, respectively, collectively impacting the CPI year-on-year increase by approximately 0.09 percentage points; the price decline of fuel-powered cars continued to narrow to 2.3% year-on-year. The year-on-year increase in service prices has gradually expanded since March, rising by 0.6% this month, an increase of 0.1 percentage points compared to last month, impacting the CPI year-on-year increase by approximately 0.23 percentage points. Among them, the prices of housekeeping services and hairdressing increased by 2.3% and 1.0% year-on-year, respectively, with relatively stable increases; the prices of medical services and educational services increased by 1.6% and 1.2% year-on-year, respectively, while the rental fees for transportation and tourism prices increased by 0.8% and 0.7% year-on-year, respectively, with both increases expanding.

II. PPI Year-on-Year Decline Narrows

The PPI month-on-month ended a continuous downward trend for 8 months, changing from a decrease of 0.2% last month to flat this month. The main characteristics of the month-on-month changes in PPI this month are: first, the improvement in supply and demand relationships has led to some energy and raw material industry prices turning from decline to increase month-on-month. The price of coal processing changed from a decrease of 4.7% last month to an increase of 9.7%, the price of coal mining and washing changed from a decrease of 1.5% to an increase of 2.8%, the price of black metal smelting and rolling changed from a decrease of 0.3% to an increase of 1.9%, the price of glass manufacturing changed from a decrease of 1.5% to an increase of 0.1%, and the price of electricity and heat production and supply changed from a decrease of 0.9% to an increase of 0.1%. Second, external factors affected the domestic oil and some non-ferrous metal industry prices to decline month-on-month. International non-ferrous metal prices fluctuated at high levels, and domestic non-ferrous metal smelting and rolling industry prices increased by 0.2%, a decrease of 0.6 percentage points compared to last month, with gold smelting and aluminum smelting prices both increasing by 0.2%, while copper smelting prices decreased by 1.1%. The decline in international oil prices led to domestic oil extraction and refined oil product manufacturing prices decreasing by 1.4% and 0.6%, respectively.

The PPI decreased by 2.9% year-on-year, with the decline narrowing by 0.7 percentage points compared to last month, marking the first narrowing since March of this year. In addition to the impact of a lower comparison base from the same period last year, China has intensified the implementation of more proactive macro policies, leading to positive changes in prices in some industries. First, the continuous optimization of the domestic market competition order has led to a narrowing of the year-on-year decline in prices in related industries. The construction of a unified national market is advancing deeply, disorderly competition among enterprises is being addressed, and capacity governance in key industries is being carried out in an orderly manner, resulting in a narrowing of the year-on-year decline in prices in related industries. The year-on-year decline in prices for coal processing, black metal smelting and rolling, coal mining and washing, photovoltaic equipment and components manufacturing, and new energy vehicle manufacturing narrowed by 10.3, 6.0, 3.2, 2.8, and 0.6 percentage points compared to last month, respectively, reducing the downward impact on the PPI year-on-year by approximately 0.50 percentage points, which is the main reason for the narrowing of the PPI year-on-year decline. Second, the steady growth of new driving forces has led to a year-on-year rebound in prices in related industries. Emerging industries are thriving, technological innovation and industrial innovation are deeply integrated, and green development is improving quality and efficiency, leading to a year-on-year rebound in prices in related industries. The prices of integrated circuit packaging and testing series increased by 1.1%, the prices of ship and related device manufacturing increased by 0.9%, the prices of communication system equipment manufacturing increased by 0.3%, and the prices of solid waste treatment equipment increased by 0.3%; The prices of electronic special materials manufacturing and intelligent unmanned aerial vehicle manufacturing changed from a decrease of 1.6% and 0.5% last month to remaining flat; the price decline in the waste resource comprehensive utilization industry narrowed by 5.4 percentage points. Thirdly, the increase in upgraded consumer demand has driven the prices of certain industries to rise year-on-year. The prices of arts and crafts and ceremonial supplies manufacturing increased by 13.0%, the prices of sports ball manufacturing increased by 4.7%, the prices of musical instrument manufacturing increased by 1.6%, the prices of nutritional food manufacturing increased by 0.9%, the prices of specialized sports equipment and accessories manufacturing increased by 0.4%, and the prices of health food manufacturing increased by 0.3%