China's consumer inflation slowed in June, even as producer prices accelerated, reflecting divergent trends across the world's second-largest economy.
The headline consumer price index rose 1.0% year over year in June, easing from 1.2% in both April and May and marking the slowest increase in three months, according to data released by the National Bureau of Statistics on Thursday.
The reading came in slightly below the 1.1% consensus forecast tracked by Investing.com.
On a monthly basis, consumer prices fell 0.3% in June after edging down 0.1% in May, compared with market expectations for a 0.2% decline.
Food prices declined 1.6% from a year earlier, while non-food prices increased 1.5%. Consumer goods prices rose 1.1%, and services prices increased 0.8%.
Among major categories, transportation and communication prices rose 4.1%, healthcare costs increased 2.3%, and clothing prices gained 1.4%. Housing prices, however, fell 0.3% from a year earlier.
Core inflation, which excludes food and energy, rose 1.0% year over year in June. Consumer prices increased 1.0% on average during the first six months of 2026.
Meanwhile, China's producer price index rose 4.1% year over year in June, accelerating from 3.9% in May and matching the consensus forecast tracked by Investing.com.
The increase marked the fourth consecutive monthly gain and the fastest pace since July 2022, supported by firmer commodity prices and rising production costs as geopolitical tensions in the Middle East continued to underpin global energy and raw material markets.
Production material prices increased 5.5%, up from 5.2% in May, led by mining, raw materials, and processing.
Consumer goods prices remained under pressure, falling 0.9% from a year earlier, as food prices declined 2.1% and clothing and daily-use goods each fell 1%.
The latest inflation data highlights the uneven nature of China's economic recovery, with an AI-driven export boom supporting advanced manufacturing while weak household spending, sluggish investment, and the prolonged property downturn continue to weigh on domestic demand.
Although firmer prices have lifted profits in some upstream and high-tech industries, manufacturers focused on the domestic market continue to struggle to pass higher costs on to consumers.
Intense competition has also squeezed profit margins across sectors, including electric vehicles and food delivery.
Analysts have called for a stronger policy support to rebalance the economy by boosting domestic demand and addressing excess industrial capacity, with resilient exports allowing policymakers to delay more aggressive stimulus measures.
