China Inflation Hits 0.7% in October as Consumer Prices Slow and Producer Prices Accelerate
Key Facts
China’s consumer price index rose 0.7% year on year in October, slowing by 0.2 percentage points from September, according to the National Bureau of Statistics. The reading was below economists’ expectations of 0.8% and followed an annual increase of 0.9% in the previous month, Reuters reported. On a monthly basis, food prices fell 1.0%, while service prices rose 0.1% after declining 0.2% in September, according to bureau data. This reflects divergence within the price basket, with lower food prices weighing on the index while services returned to growth during the month. By contrast, the industrial producer price index rose 5.7% year on year, highlighting a different price trajectory for factories than for consumers.
Core inflation, which excludes food and energy, rose 0.8% year on year in October, down 0.2 percentage points from the previous month, according to the National Bureau of Statistics. The reading shows that the increase in the headline index was not accompanied by a similar acceleration in the core measure. Lower food prices were one of the monthly factors at work: egg prices fell 6.3%, fresh vegetables 5.8% and fresh fruit 0.6%. The bureau said these categories together reduced the monthly consumer price index by about 0.13 percentage points. Food prices overall also fell 1.0% month on month, after rising 0.4% in September. Service prices, meanwhile, shifted from a monthly decline in September to an increase in October.
Energy was the biggest driver of the annual increase in consumer prices, with gasoline prices rising 22.4% in October, an acceleration of 5.8 percentage points from the previous month. Gasoline contributed about 0.63 percentage points to the annual increase in the consumer price index, according to the National Bureau of Statistics. Factory costs also rose, with producer prices up 5.7% year on year, compared with a 5.0% increase in September and above the 5.3% forecast in a Reuters poll. The producer price index also rose 0.7% month on month, while its annual rate of change accelerated by 0.7 percentage points from the previous month. Prices of purchased production inputs rose 18.6% year on year in the fuel and power category and 16.8% in chemical raw materials, according to bureau data. The figures show a divergence between energy price pressures on production costs and falling food prices, which limited consumer price increases during the month.
Inflation data were released amid cautious trading in Asian markets, though Reuters’ report on the Nov. 9 session described a steady start. Japan’s Nikkei gained 2.5%, while South Korean stocks posted modest gains, according to the report. It did not link the indexes’ moves to Chinese inflation data. The report said doubts about demand for computer chips had driven technology-heavy Asian markets to some of their steepest declines in years during the previous week. It described a return to calm at the start of the session as concerns related to artificial intelligence and the Middle East receded, while the dollar remained supported by U.S. interest-rate expectations. The stock moves described in the report therefore remain separate context from China’s consumer price reading.
Attention is turning to China’s October trade figures following the release of the price data; FXEmpire’s calendar listed their release date as Nov. 10, 2026. The expected data include the trade balance, while Reuters said investors would look for further indications of the world’s second-largest economy’s condition. The trade figures were presented as the next milestone for tracking economic activity after the release of consumer and producer price data. The comparison between producer price growth and slowing consumer inflation provides context for assessing the upcoming trade data. A current account report release date of Nov. 13 was not confirmed in the available information, so it is not included as a confirmed date. The trade figures scheduled for Nov. 10 remain the next event specified on the calendar.