As oil prices fall back, making a case that global (and even local) inflation is a big issue is getting to be uphillwork. The latest example comes from China, where producer price inflation has now fallen back to a straight rate of 4% this month, down from an annualised 4.5% last month, thus registering the lowest reading since March 2004. And don't miss the fact that:
Manufacturers of producer goods priced up their products by only 1% over last year (+1.5% in Sept). Consumer goods manufacturers suffered the seventh successive month of deflation, worsening to 0.5% YoY in Oct. (-0.4% in Sep.). Mild inflation in food (+0.3%), clothing (+1.2%) and daily use articles (+1.5%) was more than offset by the continued deflation in durable goods (-3.2%).
In fact the y-o-y CPI was 1.2% in October, up just a touch on the September reading. The big-push factor was fresh vegetables which rose at an annualised rate of 17.5%.
Information from Denise Yam at Morgan Stanley
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