Core Viewpoints - The transmission effect of upstream price increases to downstream is weakening, with PPI showing marginal improvement in August due to significant recovery in commodity prices [2][10][70] - The overall PPI remained at 0% month-on-month, primarily due to low capacity utilization in downstream sectors, which hindered the reflection of upstream price increases [2][10][70] PPI Analysis - In August, PPI year-on-year decreased by 2.9%, an improvement of 0.7 percentage points from the previous month, aligning with market expectations [2][10][70] - Major commodities like coal and steel continued to rise, contributing positively to PPI, while international oil price declines negatively impacted domestic oil prices [2][10][70] - Downstream sectors are experiencing significant price reductions, with PPI declines in industries such as food and automobiles, which saw respective month-on-month decreases of 0.3% [2][10][70] CPI Analysis - CPI year-on-year fell to -0.4% in August, influenced by a high base from the previous year and weak food prices, with food CPI dropping by 4.3% [3][23][50] - The core CPI is expanding, with core goods CPI rising by 0.1 percentage points to 0.9%, driven by high gold prices and demand from the third batch of national subsidies [3][29][71] - Service CPI showed slight growth, supported by summer travel and healthcare service reforms, while rental prices remained weak due to high youth unemployment [4][33][62] Future Outlook - Commodity prices are expected to continue rising, but excess supply in downstream sectors may limit the transmission of price increases from upstream [4][72] - Year-end PPI is projected to recover to a maximum of -2.1%, while CPI may remain negative in Q3 but could turn positive in Q4 due to policy support for service consumption [4][72]

宏 观 研 究 物价数据 2025 年 09 月 10 日 为何大宗涨价拉不起 PPI？ ——通胀数据点评（25.08） 事件：9 月 10 日，国家统计局公布 8 月通胀数据，CPI 同比-0.4%、前值 0%、预期-0.2%、 环比 0%；PPI 同比-2.9%、前值-3.6%、预期-2.9%、环比 0%。 核心服务 CPI 同比在暑期出行、医疗服务改革等支撑下延续上涨，而房租 CPI 因青年就业 问题持续弱于季节性。8 月，服务 CPI 同比较前月小幅上行 0.1pct 至 0.6%。结构上，核 心服务 CPI 环比 0%、符合季节性（0%），一方面受暑期出行支撑；统计在食品中的在外 餐饮 CPI 同比上行 0.8pct 至 1.9%。另外医疗服务改革持续拉动医疗服务价格上涨，同比 +0.5pct 至 1.6%。而房租 CPI 受青年失业率较高的拖累，8 月环比 0%、不及季节性。 ⚫ 核心观点：上游涨价对 PPI 环比贡献转正，但中下游产能利用率偏低对 PPI 拖累仍较大。 统计因素的扰动消退后，8 月 PPI 边际改善，主要表现为大宗商品价格对 PPI 环比拉动明 显回升。PPI 为每月 5 日、2 ...

Core Viewpoints - The weak performance of PPI is attributed to two "dark lines": the timing of statistics and low capacity utilization in the mid and downstream sectors [2][8][69] - In July, PPI continued to bottom out, with a month-on-month decline of 0.2% and a year-on-year rate of -3.6%, which was below market expectations [2][8][69] - The rise in commodity prices did not fully reflect in the PPI due to the timing of price surveys, which did not capture late-month price increases [2][8][69] PPI Analysis - The PPI's month-on-month decline was influenced by a significant drag from mid and downstream prices, which contributed to a -0.3% impact on PPI [2][13][69] - The PPI performance was also affected by tariffs, with industries heavily reliant on exports experiencing downward price pressure [2][13][69] - High-frequency data showed a divergence from PPI trends, with coal and steel prices recovering, while coal mining and black metal processing remained negative [2][8][69] CPI Analysis - In July, the core CPI rose to its highest level in a year and a half, driven by demand recovery and the end of commodity subsidies [3][20][70] - The CPI's month-on-month increase of 0.4% was slightly above the average since 2017, with core CPI rising 0.8% year-on-year [3][20][70] - The demand for core services improved due to summer travel, although rental prices remained weak [3][28][70] Food Prices Impact - Food prices were weak, constraining the CPI's recovery, with food CPI down 1.6% year-on-year, a decline that expanded by 1.3 percentage points from the previous month [4][33][71] - Fresh vegetable prices fell significantly, contributing to the downward pressure on CPI [4][33][71] - The supply of pork continued to rise, leading to lower pork prices, which also impacted the overall food CPI [4][34][71] Future Outlook - The "anti-involution" policy is expected to boost commodity prices, but excess supply in the mid and downstream sectors may limit the transmission of upstream price increases [4][39][71] - The forecast suggests that inflation will remain weak throughout the year, with limited recovery in both PPI and CPI due to the current supply-demand dynamics [4][39][71] - Core commodity CPI may be suppressed by downstream PPI, and agricultural supply is expected to remain ample, leading to moderate improvements in CPI [4][39][71]

Inflation Data Summary - On August 9, the National Bureau of Statistics released July inflation data: CPI year-on-year at 0%, previous value 0.1%, expected -0.1%, month-on-month 0.4%; PPI year-on-year at -3.6%, previous value -3.6%, expected -3.4%, month-on-month -0.2%[8]. - The weak PPI performance is attributed to low capacity utilization in mid and downstream sectors, which hinders price transmission from upstream to downstream[1][2][4]. - July PPI continued to decline, with a month-on-month change of -0.2%, not meeting market expectations of -3.4%[9][13]. - The contribution of commodity prices to PPI was estimated at 0.1% month-on-month, despite some recovery in coal and steel prices[1][9]. CPI Insights - Core CPI in July rose to its highest level in 1.5 years, driven by demand recovery and the end of commodity subsidies, with a month-on-month increase of 0.4%[21]. - Food CPI decreased by 1.6% year-on-year, with fresh vegetable prices dropping by 7.6% and fresh fruit prices increasing by 2.8%[30][43]. - The core service CPI remained stable at 0.5% year-on-year, with significant increases in travel-related costs, such as airfares rising by 17.9% month-on-month[27]. Future Outlook - The "anti-involution" policy is expected to boost commodity prices, but excess supply in mid and downstream sectors may limit price transmission from upstream, keeping inflation weak throughout the year[4][33]. - Core commodity CPI may remain subdued due to pressure from downstream PPI and abundant agricultural supply, leading to only moderate improvements in CPI[4][33].

Core Viewpoints - The manufacturing PMI for May increased marginally to 49.5%, up 0.5 percentage points from the previous month, indicating a slight recovery in manufacturing activity [2][10][52] - The new export index remains low, while domestic demand, particularly in consumer goods and equipment manufacturing, shows significant improvement [2][21] Manufacturing Sector - The manufacturing PMI shows overall improvement, with production and new order indices rising by 0.9 and 0.6 percentage points to 50.7% and 49.8%, respectively [2][52] - The production index has recovered above the expansion threshold, while the new order index remains in contraction territory, indicating faster production but weaker demand [2][10] - Industries with high domestic demand, such as equipment manufacturing and consumer goods, have seen PMIs rise by 1.6 and 0.8 percentage points to 51.2% and 50.2% [2][21] - Conversely, export-dependent sectors like textiles and chemicals have underperformed, with production and new order indices below the critical point [2][21] Non-Manufacturing Sector - The non-manufacturing PMI decreased slightly to 50.3%, with the construction sector experiencing a notable decline due to weak real estate performance [2][67] - The construction PMI fell by 0.9 percentage points to 51%, while civil engineering activities are accelerating, as indicated by a PMI of 62.3% [29][67] - Service sector PMI saw a marginal increase to 50.2%, driven by improved activity in tourism and dining during the holiday period [40][67] Future Outlook - Uncertainties surrounding U.S. tariff policies remain significant, necessitating close monitoring of fiscal policies' impact on domestic demand [45] - The recent court ruling against Trump's tariffs has created a temporary freeze on tariff enforcement, adding to the external uncertainties [45] - Service consumption and infrastructure investment are expected to be key areas for fiscal support, potentially enhancing domestic demand [45]

Core Viewpoints - The manufacturing PMI for May increased marginally to 49.5%, indicating a slight recovery in manufacturing activity, although it remains below the expansion threshold of 50 [2][10] - The new export index is low, but domestic demand, particularly in consumer goods and equipment manufacturing, shows significant improvement [2][21] - The service sector PMI also saw a slight increase, driven by improvements in life services, particularly during the "May Day" holiday [40][67] Manufacturing Sector - The manufacturing PMI rose by 0.5 percentage points to 49.5%, with production and new orders indices increasing by 0.9 and 0.6 percentage points to 50.7% and 49.8%, respectively [2][52] - The production index has recovered above the expansion line, while the new orders index remains in contraction territory, indicating a disparity between production acceleration and weak demand [2][10] - Industries with strong domestic demand, such as equipment manufacturing and consumer goods, showed better performance, with PMIs rising by 1.6 and 0.8 percentage points to 51.2% and 50.2% [21][24] New Orders and Exports - The internal demand orders index rose above the expansion line to 50.1%, while the new export orders index increased by 2.8 percentage points to 47.5%, indicating a divergence in recovery between domestic and export orders [3][24] - The average value of new export orders over April and May remains lower than in March, suggesting ongoing pressure on exports [3][24] Non-Manufacturing Sector - The non-manufacturing PMI decreased slightly to 50.3%, primarily due to a decline in the construction sector, which fell by 0.9 percentage points to 51% [67][29] - Despite the decline in construction, civil engineering activities are accelerating, with the civil engineering PMI rising to 62.3% [29][84] - The service sector PMI increased by 0.1 percentage points to 50.2%, supported by active consumer spending during the holiday period [40][67] Future Outlook - Uncertainties surrounding U.S. tariff policies remain significant, with ongoing monitoring of fiscal policies' support for domestic demand [45][45] - The focus will be on the potential for fiscal measures to bolster service consumption and infrastructure investment, which are expected to enhance domestic demand support [45][45]