China’s client costs have been flat y/y in July, as authorities efforts to rein in extreme competitors supplied some aid from deflationary pressures. Analysts warning that the trail out of deflation can be lengthy and should require stronger stimulus measures.
Shopper Value Index (YoY) (July) 0.0%,
- no change from a yr earlier, beating forecasts for a small decline
- a second month with out unfavourable readings
- anticipated -0.1%, prior +0.1%
Shopper Value Index (MoM) (July) +0.4%
- anticipated +0.3%, prior -0.1%
Producer Value Index (YoY) (July) -3.6%
- factory-gate costs continued to fall
- producer value index down for the thirty fourth consecutive month of producer deflation
- anticipated -3.3%, prior -3.6%
Authorities have launched a marketing campaign to curb value wars (Chinese language coverage shift to “Anti-involution”) which have been squeezing firm earnings and wages, however analysts warn that deeper issues stay. Family expectations for future costs have weakened, and the GDP deflator — a broad gauge of economy-wide costs — has now fallen for 9 straight quarters, the longest decline in many years.
