Inflation Data Summary - In May 2025, the CPI year-on-year was -0.1%, unchanged from the previous month, while the month-on-month change was -0.2%, down from 0.1%[3] - The PPI year-on-year decreased to -3.3% from -2.7%, with a month-on-month change of -0.4%, consistent with the previous month[3] CPI Analysis - The CPI month-on-month decline of -0.2% aligns with the seasonal average over the past four years[3] - Food prices showed resilience with a month-on-month change of -0.2%, better than the four-year average of -0.9%, while non-food prices also fell by -0.2%, below the average of 0.0%[3] - Pork prices have remained stable, contributing less to CPI changes, with fresh vegetables and fruits showing stronger seasonal performance[3] PPI Insights - The PPI has broken below the previous range of -2.0% to -3.0%, indicating a significant downward trend[3] - Production materials have seen a month-on-month decline for five consecutive months, with a year-on-year drop of -4.0%[3] - Energy prices fell by 1.7% month-on-month, contributing approximately 0.13 percentage points to the CPI decline, accounting for nearly 70% of the total decrease[3] Economic Outlook - Actual GDP is expected to remain resilient in Q2, but nominal GDP may face pressure, impacting equity market potential[3] - The report highlights the need for increased policy measures to stimulate demand and address supply-side competition issues[3] Risk Factors - Potential risks include slower-than-expected domestic policy implementation, unexpected declines in real estate investment, and inflationary pressures from the U.S.[3]

Core Points - The U.S. Department of Commerce has released the preliminary economic report for Q1 2025, showing a quarter-over-quarter contraction of 0.07%, an annualized decline of 0.3%, but a year-over-year increase of 1.9%, with nominal GDP at $73,227 billion [1][3] - There is a distinction between nominal GDP and real GDP, with the real GDP for Q1 2025 calculated at $58,815.25 billion, reflecting a quarter-over-quarter decrease of $40.5 billion [3][4] - The nominal GDP using market prices for Q1 2025 is reported at $74,944 billion, indicating a nominal growth rate of 4.6% when not adjusted for price fluctuations [6][9] Summary of Different Accounting Standards - The real GDP is calculated using a base year price index (2017), while nominal GDP reflects the current market prices of goods and services [4][6] - The unadjusted GDP figure of $73,227 billion for Q1 2025 shows a year-over-year increase of 1.9% when price fluctuations are excluded, while the adjusted figure shows a year-over-year increase of 2.1% [6][9] - The difference between seasonally adjusted and unadjusted figures is significant, with the former accounting for seasonal variations and the latter providing a raw economic snapshot [7][10] Implications of Mixed Reporting Standards - The mixed use of seasonal adjustment standards in reporting can lead to confusion among readers, as the quarter-over-quarter figures typically use seasonally adjusted data while year-over-year figures often use unadjusted data [10][11] - This practice is common in China, where the GDP figures are reported using both standards, leading to potential misunderstandings among those unfamiliar with economic reporting conventions [10][11]

Group 1 - The article highlights the upcoming release of key economic indicators for the U.S. and Canada, including the first quarter's real GDP and core PCE price index annualized quarterly rate [1] - It mentions the initial quarterly rate of real personal consumption expenditures and the labor cost index, which are crucial for understanding consumer behavior and inflationary pressures [1] - Additionally, the article notes that Canada's February GDP monthly rate will also be published shortly, indicating the importance of monitoring economic performance in both countries [1]

Group 1 - The core viewpoint of the article emphasizes the need for a reasonable recovery in prices to support macroeconomic stability, as current GDP growth is not aligned with low price levels, indicating a "quantity-price divergence" [1][4][6] - The article discusses the phenomenon where companies opt for "price for volume" strategies, leading to price declines while maintaining production, which can undermine market confidence [4][5] - Historical lessons from Japan's economic experience in the 1990s highlight the importance of setting price targets to ensure economic health, as mere GDP growth is insufficient [5][7][8] Group 2 - The adjustment of the CPI growth target from 3% to a more realistic 2% reflects a pragmatic approach to economic policy, emphasizing the need for a balance between quantity and price [8] - The article suggests that current monetary and fiscal policies prioritize GDP growth over price stability, indicating a need for increased focus on price metrics in future policy frameworks [8][9] - The goal for 2025 is to achieve approximately 5% GDP growth, but achieving a positive GDP deflator may require extraordinary policy measures, highlighting the critical role of price targets in economic planning [8][9]