China’s October inflation figures are out and are good news. The CPI came in at a comprehensively Western 1.7% year on year, down from 1.9% previously (-0.1 mom).
The internals would make the PBOC (and the CCP) very happy with no sign inflation in any essentials.
For me, though, even better news is a significant slowing in the falls of the PPI (producer prices) to -2.8% year on year from -3.6% in Septmeber (0.2 mom). Late last year when the PPI collapse began I was pilloried for arguing that it meant Chinese growth was in trouble. History proved me right and now some pricing power appears to be slowly returning to China’s industrial economy along with greater activity.
This is a good report that bodes well for an upside surprise in today’s growth figure.
