China's consumer prices rise on holiday deflationary pressure persists

China’s consumer prices unexpectedly increased in October, as holidays during the month boosted travel, food and transport demand a pickup many economists saw as likely to be fleeting.

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The consumer price index (CPI) rose 0.2 per cent from a year earlier, after a 0.3 per cent decline in September, according to data released by the National Bureau of Statistics on Nov 9. The median forecast of economists surveyed by Bloomberg was for a 0.1 per cent drop. China’s core CPI, which excludes volatile items such as food and energy, climbed 1.2 per cent.

Service costs also edged up 0.2 per cent in October and contributed to the rise in inflation, according to the statistics bureau. Factory-gate deflation eased, despite persisting for a 37th straight month.

“The broad-based price increases likely reflect seasonal demand around the Golden Week,” Goldman Sachs Group economists wrote in a note. “Its durability remains to be seen.”