China Producer Prices Fall the Least in 4 Months

China’s producer prices dropped 2.9% year-on-year in August 2025, easing from a 3.6% decline in July, which had been the steepest drop since July 2023 and in line with market expectations. This marked the 35th consecutive month of producer deflation, but also the smallest decline since April, amid government efforts to boost consumption. Production material costs declined at a softer pace (-3.2% vs -4.3% in July), with smaller contractions in mining (-11.5% vs -14.0%), raw materials (-4.1% vs -5.4%), and processing (-2.2% vs -3.1%) Meanwhile, consumer goods prices remained weak (-1.7% vs -1.6%), weighed down by food (-1.7% vs -1.8%) and durable goods (-3.7% vs -3.5%). Prices of clothing were unchanged (0.0% vs -0.1%), and prices of daily-use goods rose more slowly (0.4% vs 0.6%). In the first seven months of 2025, factory-gate prices shrank 2.9%. Month-on-month, the PPI was flat, after a 0.2% fall in the preceding month.