China's July consumer prices flat, factory-gate prices miss forecast
Factory-gate prices have been declining for more than two years, and Saturday's data suggest early-stage efforts to tackle price competition have yet to yield results.
Deflationary pressures have prompted Chinese authorities to address overcapacity in key industries. However, the latest round of industrial restructuring appears to be a pared-down version of the sweeping supply-side reforms launched a decade ago that were pivotal in ending a deflationary spiral.
The consumer price index was flat year-on-year in July, compared with a 0.1% rise in June, National Bureau of Statistics data showed on Saturday, beating a Reuters poll forecast of a 0.1% slide.
Food prices fell 1.6%, following a 0.3% decline in June.
Extreme weather added to the economic strain, with sweltering heat gripping much of China's eastern seaboard last month and heavier-than-usual downpours lashing the country with the East Asian monsoon stalling over its north and south.
On a monthly basis, the CPI edged up 0.4%, against a 0.1% drop in June and exceeding forecasts for a 0.3% rise.
Core inflation, which excludes volatile food and fuel prices, was 0.8% in July from a year earlier, quickening from June's 0.7%.
A prolonged housing downturn and a fragile trade truce with the U.S. are weighing on consumer spending and factory activity.
Policymakers are prioritising efforts to curb what they view as disorderly competition in the auto and other key industries, rather than rolling out immediate stimulus measures, but analysts see limited potential for the campaign to significantly boost final demand.
The producer price index (PPI) fell 3.6% year on year in July, missing economists' forecast of a 3.3% slide. It fell 3.6% in June too, which was the lowest since July 2023.
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CNBC
an hour ago
- CNBC
Here are the 3 big things we're watching in the market in the week ahead
Earnings season is winding down, and the market has held up relatively well through the onslaught of quarterly results and the implementation of tariffs. Wall Street's next test this week: Inflation data. The pair of reports measuring price pressures in the U.S. economy carries implications for the Federal Reserve's next interest rate move and likely the stock market's. It's too soon for President Donald Trump 's newest tariff rates to show up in the numbers just yet, but we'll be watching for any inflation signs from the levies already in place. The S & P 500 is coming off a positive week, its third in the past four, and sits just shy of a fresh record-closing high. The Nasdaq ended last week at a record. There are a few other economic reports on this week's schedule. Within the portfolio, it's mostly quiet on the earnings front — save for our newest holding. Here's a closer look at what we're watching for. 1. Inflation data: The consumer price index (CPI) and the wholesale inflation gauge, known as the producer price index (PPI), are slated to be released Tuesday and Thursday morning, respectively. The overarching theme for both inflation releases: What do they mean for the Fed rate policy at its upcoming September meeting and beyond? The CPI and PPI arrive after a weak July jobs report — and the accompanying downward revisions to the prior two-month totals — that caused investors to dramatically reconsider the health of the U.S. labor market. Nurturing maximum employment is one part of the Fed's dual mandate; fostering price stability is the other. Traders went from betting the Fed will keep rates steady again in September — thanks to Fed Chairman Jerome Powell throwing cold water on the idea at the Fed's July meeting — to overwhelmingly pricing in a quarter-point cut, according to the CME FedWatch tool. Now comes the CPI and PPI, which shine a light on the price-stability piece of the Fed's mandate and, in particular, the impact that Trump's tariffs are having on the rate of inflation. In the June CPI report, inflation picked up to 2.7% overall and 2.9%, when excluding the more volatile food and energy prices, from the May rates of 2.4% and 2.8%, respectively. Tariff-sensitive categories like furniture and apparel showed increases in the June CPI, and Wall Street will once again look closely at those areas in the July data. If inflation comes in really hot, will the market recalibrate its expectations for September once again? "We see the biggest risk to markets in the [second half of the year] from a reacceleration in both goods and service inflation, leading the Fed to remain on hold and putting upward pressure on interest rates," strategists at Wolfe Research said in a note to clients Friday. Economists expect the July CPI to show a 0.2% increase on a monthly basis and a 2.8% increase annually, according to Dow Jones. Excluding food and energy, the so-called core CPI is projected to rise 0.3% month over month and 3.1% on a 12-month basis; that would be an acceleration from 0.2% and 2.9%, respectively, in June. For the PPI, which is seen as a leading indicator for the CPI because it measures what companies pay for their own inputs like steel, the consensus is for a 0.2% monthly gain after being flat in June, according to Dow Jones. On a core basis, PPI is expected up 0.3% month over month. Core PPI also was flat in June. Central bankers say the reason they haven't lowered rates yet this year is uncertainty around the inflationary impact of the tariffs. While it's good to get another month's worth of data, the CPI and PPI for July won't answer that question entirely, in part because tariff levels are still evolving, and in part because businesses that may eventually raise prices are still working through inventory accumulated before duty rates went up. However, at least for Minneapolis Fed President Neel Kashkari, he told CNBC last week that he's getting more comfortable with the idea of cutting rates without knowing the full effect of tariffs. Kashkari is an alternate member of the Fed's policymaking arm this year and a voting member in 2026, so his comments are notable. At the July meeting, two central bankers did vote for a cut. "There's a bunch of data that I know and that I've got confidence in, and there's data that I don't know and we're not going to know for a while," Kashkari said Wednesday on "Squawk Box." "The data that I think we know is that the economy is slowing. Housing services inflation is gently declining. Non-housing services inflation is coming down. Wage growth is coming down. We've seen the jobs number, and consumer spending cooling. All of that suggests the real underlying economy is slowing." He continued, "The part I don't have confidence in yet is, what are the ultimate effects of tariffs going to be on inflation? And what I'm realizing is we may not know the answer to that for quarters, or a year or more. That tells me, as one policymaker, that I need to start leaning more on the data I've got confidence in. The economy is slowing, and that means in the near term, it may become appropriate to start adjusting the federal funds rate." 2. Other data: While the CPI and PPI are the biggest data points of the week, there are a few other releases that the market will be watching due to the heightened focus on the health of the economy post-jobs report. On Thursday morning, we'll get the weekly initial jobless claims report — a measure of both first-time unemployment insurance filings, which can be used to gauge layoff activity among employers, and so-called continuing claims, which offer insights into how easily people who lose their jobs can find a new gig. On Friday, the July retail sales report is out, courtesy of the Commerce Department, offering a look at the level of consumer spending and where people spent their money. Amazon' s Prime Day was held in July, so a measure of online spending in the report will likely be influenced by that. Also on Friday, the University of Michigan's preliminary consumer sentiment survey for the month of August will be out. After some dour readings as Trump's tariff rhetoric ramped up earlier this year, the sentiment releases have stabilized. The inflation expectations component of the survey — also closely watched — tumbled to below pre-tariff levels in July . 3. Earnings: After a busy stretch of earnings, Cisco Systems is the lone Club name to report quarterly results in the week ahead. It's the first time we'll hear from the networking and security provider since it joined the portfolio on July 17. For its fiscal 2025 fourth quarter, Wall Street expects Cisco to report revenue of $14.62 billion and earnings per share (EPS) of 98 cents, according to estimates compiled by LSEG. Beyond the headline numbers, investors will be keyed into Cisco's orders and commentary around its AI products, along with its guidance for fiscal 2026. Analysts at Morgan Stanley said in a recent note to clients that expectations are for mid-single-digit order growth, "which we expect will continue to drive momentum in the stock." Last quarter, Cisco said it booked more than $600 million in AI infrastructure orders from "webscale" customers, its term for large data center operators often called hyperscalers, such as Club names Amazon and Microsoft . A big part of our thesis is Cisco continuing to make inroads into this lucrative market, so we'll be paying close attention to the latest order figure. As for fiscal 2026 revenue overall, Cisco's initial guidance is likely to come in conservative, "as the environment remains dynamic," Morgan Stanley argued. The current Wall Street consensus for Cisco's fiscal 2026 implies roughly 5% revenue growth on an annual basis, according to FactSet. Week ahead Monday, Aug. 11 Before the bell: Ltd. (MNDY), Village Farms International (VFF), Franco-Nevada Corporation (FNV), MAG Silver Corp. (MAG), Rumble (RUM), WW International, Inc. (WW), Agenus Inc (AGEN), United States Cellular (USM), Kymera Therapeutics (KYMR), Dole (DOLE), Ballard Power Systems (BLDP), EuroDry (EDRY), Barrick Mining Corporation (B) After the bell: (BBAI), Oklo (OKLO), AMC Entertainment Holdings (AMC), AST SpaceMobile (ASTS), Archer Aviation (ACHR), PennantPark Investment Corp. (PNNT) Tuesday, Aug. 12 July consumer price index at 8:30 a.m. ET Before the bell: Circle Internet Group, Inc. (CRCL), Sea Limited (SE), Pony AI Inc. (PONY), Liquidia Technologies, Inc. (LQDA), On Holding AG (ONON), DarioHealth Corp. (DRIO), Paysafe Group Holdings Limited (PSFE), Autolus Therapeutics plc (AUTL), Bitcoin Depot (BTM), Anavex Life Sciences (AVXL), Cardinal Health, Inc. (CAH), Tencent Music Entertainment Group (TME) After the bell: CoreWeave (CRWV), Rigetti Computing (RGTI), Cava Group (CAVA), Rekor Systems, Inc. (REKR), Zevra Therapeutics (ZVRA), DoubleDown Interactive (DDI), H & R Block (HRB) Wednesday, Aug. 13 Before the bell: Arcos Dorados Holdings Inc. (ARCO), Brinker International, Inc. (EAT), Marex Group Plc (MRX), Innoviz Technologies (INVZ), Perspective Therapeutics, Inc. (CATX), Cae Inc (CAE), Elbit Systems (ESLT) After the bell: Cisco Systems (CSCO), Equinox Gold Corp. (EQX), Avino Silver & Gold Mines (ASM), Electrovaya (ELVA), Red Robin Gourmet Burgers (RRGB), SurgePays (SURG), Alvotech (ALVO), Fidelis Insurance Holdings Limited (FIHL) Thursday, Aug. 14 July producer price index at 8:30 a.m. ET Before the bell: First Majestic Silver Corp. (AG), Deere & Company (DE), Inc. (JD), Amcor plc (AMCR), Advance Auto Parts Inc. (AAP), AEBI SCHMIDT GP (AEBI), Applied Industrial Technologies (AIT), Birkenstock Holding (BIRK), Cellebrite (CLBT) After the bell: Applied Materials (AMAT), Nu Holdings (NU), KULR Technology Group (KULR), Nano Nuclear Energy (NNE), SanDisk (SNDK), Pioneer Power Solutions (PPSI) Friday, Aug. 15 Retail sales at 8:30 a.m. ET The Fed's data on industrial production and capacity utilization at 9:15 a.m. ET University of Michigan's consumer sentiment survey at 10 a.m. ET Before the bell: Flowers Foods (FLO) (Jim Cramer's Charitable Trust is long CSCO, AMZN and MSFT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
The Hill
2 hours ago
- The Hill
Trump promised lower grocery prices ‘on Day One.' Here's what happened
(NEXSTAR) – Campaigning for office a year ago, standing in front of a table loaded up with bags of flour, cartons of eggs and gallons of milk, President Donald Trump told voters, 'When I win, I will immediately bring prices down, starting on Day One.' Unfortunately for him – and money-strapped Americans – it hasn't worked out that way. Nexstar employees around the country tracked a selection of grocery items over the past six months to see if prices would rise, fall or stay the same after Trump took office in January. Our observations, as well as federal data collected by the Bureau of Labor Statistics (BLS), show grocery prices overall have remained stubbornly high and even increased slightly. The overall cost of food at home has ticked up between 0.2% and 0.4% almost every month since January, according to BLS tracking. One exception was in April 2025, when prices went down 0.1% from the month before. All those tiny increases have added up to a 3% increase in food prices year-over-year. The situation at any given grocery store is more nuanced and varied than the top-line national average would indicate. Goods that are shelf-stable also turned out to be pretty price-stable at the grocery stores we checked in San Jose, California; Milwaukee, Wisconsin; and Bismarck, North Dakota between January and July of 2025. The price of a box of cookies didn't change at all over the six-month period. 'Tariff rebates' proposed: How would they work? But with fresh fruit, the time of year made a difference. Strawberries, for example, were much cheaper in the summer than they were in February. Why eggs are down, beef is up Some of the price changes also come amid industry impacts. Egg prices, for example, were inflated last year due to an avian flu epidemic. Those prices were expected to remain high into 2025, with some restaurants even imposing surcharges on egg orders. Since spiking in March, egg prices have been on the decline, but remain historically high. The latest Consumer Price Index shows the cost of eggs is up more than 27% between June 2024 and June 2025. They are, however, down nearly 11% from May to June this year. Beef prices are not bouncing back as well. Experts were warning in early 2024 that beef prices could reach record highs due to the lowest inventory since 1951, brought on by drought conditions and the rising costs of maintaining herds. Other factors that popped up this year, like tariffs and a flesh-eating screwworm, have pushed beef prices northward. New tariffs could raise prices of Ozempic, Wegovy Last month, the U.S. Department of Agriculture reported that beef prices had jumped more than 8% since the start of the year. Beef and veal prices, combined on the CPI, are up more than 10% year-over-year. Between May and June, prices jumped almost 2.5%. Americans worried grocery prices will stay high The vast majority of U.S. adults are at least somewhat stressed about the cost of groceries, a new poll finds, as prices continue to rise and concerns about the impact of Trump's tariffs remain widespread. About half of all Americans say the cost of groceries is a 'major' source of stress in their life right now, while 33% say it's a 'minor' source of stress, according to the poll from The Associated Press-NORC Center for Public Affairs Research. Only 14% say it's not a source of stress, underscoring the pervasive anxiety most Americans continue to feel about the cost of everyday essentials. Citing a report from the Tax Foundation, Nexstar's The Hill reported late last month that about 75% of the nation's food imports are expected to be impacted by Trump's latest round of tariffs, which took effect at the start of August. Days prior, an analysis by the Yale Budget Lab estimated food prices would rise more than 3% over the short term. Some foods that could see price hikes, according to The Hill, include seafood, coffee, rice, alcohol, and chocolate.
New York Post
2 hours ago
- New York Post
Why geopolitical alliance between the US and India is on ice
President Trump's announcement of sweeping new tariffs on India, totaling 50%, should dispel illusions that the US–India relationship is a warm alliance of like-minded democracies. The move marks a sharp escalation in what is now openly a trade war. Trump cited India's ongoing imports of discounted Russian oil, accusing New Delhi of helping fund Moscow's war machine and selling refined Russian crude on the open market for profit. India responded sharply, hinting at retaliation. Yet Trump pressed on: The first 25% tariff takes effect this week, with another 25% kicking in later this month. This is one of the harshest tariff regimes the US has ever imposed on a major trading partner — and it's aimed at a country Washington claims to view as a key ally. 5 President Trump's announcement of sweeping new tariffs on India, totaling 50%, should dispel illusions that the US–India relationship is a warm alliance of like-minded democracies. Trump is seen here with Indian Prime Minister Narendra Modi. REUTERS On paper, India looks like the perfect partner. It's the world's most populous democracy, largely English-speaking, and deeply embedded in the US economy. Bilateral trade in goods and services hit $212 billion in 2024, with the US trade deficit at about $46 billion. India serves as a key manufacturing hub for pharmaceuticals, apparel and tech. The US sees India as a counterweight to China in the Indo-Pacific. But India doesn't see the relationship through sentimental eyes. Since the Cold War, New Delhi has pursued a doctrine of non-alignment, which has evolved into strategic autonomy. It joins US-led forums like the Quad — in which, alongside Japan and Australia, they aim to promote a free and open Indo-Pacific without demanding formal allegiance. But India is also a member of the BRICS group of developing nations and the Shanghai Cooperation Organization. It buys weapons from the US and France, but also Russia, maintaining friendly ties with Iran and boycotting no one. 5 Russia is a long-time defense partner and energy supplier. India now imports more than a third of its oil from Russia, totaling over $50 billion annually — which is a huge spike since 2021. Modi is seen here with Russia's President Vladimir Putin. AP That instinct is rooted in deep historical memory. Colonized by Britain and sidelined by US Cold War support for Pakistan, India emerged with a fierce desire to avoid foreign dependency. Especially under the nationalist Prime Minister Narendra Modi, it sees itself not as a junior partner in a Western-led order but as a civilizational power asserting its own sovereignty. This helps explain India's refusal to isolate Russia over the Ukraine war. Russia is a long-time defense partner and energy supplier. India now imports more than a third of its oil from Russia, totaling over $50 billion annually — which is a huge spike since 2021, meaning India has taken advantage of Russia's discounts, and which makes it the largest importer of Russian crude ahead of China and Iran. Some of that oil is refined and re-exported to Western markets through a sanctions loophole. It's a lucrative arrangement India has no intention of abandoning — and it keeps Vladimir Putin in business. That's the connection driving events these past few weeks: As Trump has lost faith in Putin's willingness to engage on ending the Ukraine war, so has his impatience with Modi gone through the roof. 5 The US wants India's help in containing China and securing global supply chains. Modi is seen here with China's President Xi Jinping. Getty Images But Trump's response — tariffs as geopolitical punishment — is unusual. Tariffs are typically used to protect domestic industry. Using them to enforce foreign policy aims introduces a different logic. Is it madness? Not entirely. Tariffs are one of the few levers a president can pull unilaterally. But the India case exposes the risks of this approach. India is unlikely to cave. With 1.4 billion people (the most in the world), a $4.2 trillion economy (tied with Japan for fourth in the world) and decent economic growth, it doesn't take kindly to coercion. Worse, this tactic invites charges of hypocrisy. Other countries still trade with Russia in fertilizer, chemicals and refined products. There's also blowback. Tariffs generally raise prices for US consumers, particularly in sectors like generic drugs and clothing. They also threaten to undermine supply chain shifts away from China. Companies like Apple have moved production to India — only to find their new base hit with punitive tariffs. Meanwhile, India may retaliate against US exports in energy and aerospace. 5 The US sees India as a counterweight to China in the Indo-Pacific. But India doesn't see the relationship through sentimental eyes. Carlo – American policymakers of the pre-Trump era spoke of a shared democratic identity and mutual values. But the real relationship is transactional. The US wants India's help in containing China and securing global supply chains. India wants American technology, markets and investment. That's why cooperative efforts like the iCET tech partnership and semiconductor joint ventures may succeed where talk of 'friendship' falls flat. The signs of this can be subtle. For example, Trump has been bragging in recent weeks about having averted war between India and Pakistan earlier this year. Putting aside the likely exaggeration, it did not escape notice in New Delhi that he was placing India — an imperfect but pluralistic democracy — on equal footing with its less-than-democratic rival. For a country deeply conscious of its global standing, this surely reinforced the perception that the Trump administration views India not as a partner of principle, but as just another actor to be cajoled as the situation demands. So it is no surprise that trade negotiations have repeatedly stalled over tariffs and market access. India maintains high barriers on agricultural imports and resists regulatory alignment. The US complains of protectionism; India sees imperialism. Neither is entirely wrong. India's foreign policy is rational, pragmatic, occasionally aggressive and ruthlessly self-interested. Trump's tariffs may sting, but they won't alter that fact. 5 In 1949, President Herbert Hoover met with Indian activist Mahatma Gandhi in New Delhi. Bettmann Archive The discomfort lies in letting go of the fantasy that India is a democratic soulmate. If both sides accept that the relationship is not built on shared values but overlapping interests, then real partnership is still possible. For the likes of Trump and Modi, that's about the best that you can hope for. Dan Perry led Associated Press coverage in Europe, the Middle East, and Africa, and served as AP's special international editor. He publishes Ask Questions Later on Substack.
