July 2026 data from the National Bureau of Statistics, interpreted by senior statistician Dong Lijuan, reveals moderate trends in both consumer and producer prices. The Consumer Price Index (CPI) saw a 0.1% month-on-month decline and a 0.5% year-on-year increase, driven by international factors. Excluding food and energy, the core CPI rose 0.3% month-on-month and 0.9% year-on-year, indicating overall stability. Meanwhile, the Producer Price Index (PPI) fell 0.7% month-on-month, with a year-on-year gain of 3.5%, down 0.6 percentage points from the previous month, influenced by international and seasonal factors alongside some domestic demand growth.

CPI Monthly Decline Narrows, Annual Rise Remains Mild

On a monthly basis, the national CPI fell 0.1%, a narrower decline of 0.2 percentage points from the prior month. Global market volatility led to a 10.7% drop in domestic gasoline prices, a 5.8 percentage point larger decrease than in June, contributing about 0.35 percentage points to the CPI's monthly fall. Food prices were flat, staying 0.6 percentage points below seasonal norms. Within food, fresh vegetable prices rose 1.3%, while egg prices fell 2.1%, both significantly below seasonal averages. Abundant seasonal fruit supplies drove a 3.8% decline in fresh fruit prices, reducing the CPI by around 0.07 percentage points. However, pork prices rebounded 4.1% from a 0.8% decline in June, due to effective hog production capacity policies and extreme weather events like heatwaves and heavy rains raising transport costs, boosting the CPI by about 0.07 percentage points. Artificial intelligence-driven upgrades in consumer electronics boosted demand and prices, with tablets, computers, and mobile phones rising 11.3%, 5.5%, and 1.0% respectively, together adding 0.03 percentage points to the CPI. Service prices shifted from flat to a 0.4% increase, contributing 0.21 percentage points, fueled by summer travel demand. Travel agency fees, hotel accommodation, airfares, and vehicle rental prices rose 7.2%, 6.5%, 4.2%, and 3.6% respectively, collectively adding 0.10 percentage points. Regional policy adjustments pushed medical service prices up 1.1%, contributing 0.07 percentage points.

Year-on-year, the national CPI rose 0.5%, maintaining a modest uptrend. This represents a 0.5 percentage point slowdown from June, mainly due to lower gasoline price gains. Gasoline prices increased just 1.0%, a 16.0 percentage point drop in growth rate, reducing the energy price contribution to 0.6% and cutting the CPI impact by about 0.45 percentage points. Industrial consumer goods excluding energy rose 1.5%, a 0.2 percentage point decline from the prior month, contributing 0.37 percentage points. Gold jewelry, personal care products, and household appliances saw price increases of 24.6%, 1.7%, and 0.2% respectively, but all with slower growth, adding 0.13 percentage points collectively. Conversely, computers, tablets, and mobile phones rose 17.4%, 17.2%, and 8.5% respectively, with accelerating gains, contributing 0.14 percentage points. Service prices rose 0.7%, a 0.1 percentage point deceleration, adding 0.36 percentage points. Medical services surged 4.3%, up 0.9 percentage points, contributing 0.28 percentage points, while domestic services, dining out, and education services rose 1.3%, 1.0%, and 0.6% respectively, remaining stable. Food prices fell 1.5%, a slight 0.1 percentage point narrowing from June, reducing the CPI by 0.25 percentage points. Pork prices dropped 13.3%, a 2.6 percentage point improvement, contributing 0.25 percentage points to the decline. Fresh vegetables, fruits, grains, cooking oil, and dairy products fell between 0.3% and 1.5%. Egg prices rose 17.8%, a 2.2 percentage point slowdown, while lamb, beef, and poultry prices increased between 1.6% and 6.2%.

PPI Monthly Decline, Annual Growth Slows

On a monthly basis, the national PPI fell 0.7%, a 0.4 percentage point widening from the previous month. Key characteristics include: First, international factors pressured domestic prices. Oil extraction, refined petroleum product manufacturing, and organic chemical raw material manufacturing fell 11.8%, 8.4%, and 4.2% respectively. Non-ferrous metal mining and smelting and pressing dropped 2.1% and 1.7%, with these five sectors collectively reducing the PPI by 0.65 percentage points. Second, seasonal factors lowered some sector prices. July's hot weather, rain, and typhoons slowed construction, with ferrous metal smelting and pressing and non-metallic mineral products falling 0.8% and 0.5%. Increased hydropower and wind power generation cut prices by 10.3% and 3.9%, with these four sectors reducing the PPI by 0.11 percentage points. Third, industrial upgrades and consumption expansion boosted demand and prices in some sectors. New growth drivers like AI, high-end equipment, and new materials saw smart unmanned aerial vehicle manufacturing, carbon new materials, and ship and related equipment manufacturing rise 2.5%, 0.4%, and 0.3%. Quality-focused consumption grew rapidly, with smart home appliance manufacturing and skincare cosmetics manufacturing up 3.4% and 0.7%.

Year-on-year, the national PPI rose 3.5%, a 0.6 percentage point slowdown from June. Among sectors with price increases, oil and gas extraction, petroleum, coal, and other fuel processing, and chemical raw materials and products manufacturing rose 3.2%, 8.2%, and 9.1% respectively. Non-ferrous metal mining, smelting and pressing increased 22.6% and 20.2%, while ferrous metal smelting and pressing rose 2.7%, all with slower growth, collectively contributing 2.55 percentage points to the PPI. Coal mining and washing surged 27.1%, electrical machinery and equipment manufacturing rose 5.7%, and computer, communications, and other electronic equipment manufacturing increased 4.4%, all with accelerating growth, adding 1.53 percentage points. These nine sectors' combined upward impact was 0.56 percentage points lower than the prior month. The five sectors with the largest downward pressure were electricity and heat production and supply, automobile manufacturing, non-metallic mineral products, pharmaceutical manufacturing, and beverage and refined tea manufacturing, with declines between 2.3% and 5.7%, together reducing the PPI by 0.76 percentage points, a 0.05 percentage point improvement from June.