China's consumer market remained generally stable in July, with the consumer price index (CPI) up 0.5% year on year, according to data released by the National Bureau of Statistics (NBS) on Sunday. The core CPI, which excludes food and energy prices, was up 0.9% year on year. 

On a monthly basis, the CPI fell 0.1%, while the core CPI rose 0.3%. The year-on-year CPI increase was 0.5 percentage points lower than in June, mainly due to slower growth in gasoline prices, said Dong Lijuan, chief statistician at the NBS.

Service prices continued to support growth of consumer prices. Medical service prices rose 4.3% year on year, contributing around 0.28 percentage points to the overall CPI increase. Prices for housekeeping services, dining out, and education services rose 1.3%, 1.0% and 0.6%, respectively.

Meanwhile, China's producer price index (PPI), which measures factory-gate prices, rose 3.5% year on year but fell 0.7% month on month. 

Dong attributed the monthly decline partly to lower international crude oil prices. Prices in the oil extraction sector fell 11.8% month on month, while prices for refined petroleum products manufacturing declined 8.4%.

The July data reflected a combination of recovering domestic demand, imported price pressures and seasonal factors, said Bruce Pang, chief economist and head of research at JLL, Greater China. He said the moderate rise in consumer prices was mainly supported by service sectors, while the trend in industrial prices pointed to improving activity in the real economy.

(Cover via VCG)