May producer inflation picks up for second consecutive month, momentum strong

Updated 2018-06-11 15:43:01

China's producer inflation picked up for the second month in a row to a four-month high in May, buoyed by stronger commodity prices, suggesting the world's No.2 economy has retained growth momentum despite rocky trade relations with the U.S.

Annual consumer inflation held steady in May from the previous month, as food prices remained largely stable, official data also showed on Saturday.

The producer price index (PPI) rose 4.1 percent in May from a year earlier, bolstered by a recent jump in commodity prices and up from a lower base last year, according to the National Bureau of Statistics (NBS).

That compared with an acceleration to 3.4 percent in April.

On a month-on-month basis, the PPI rose 0.4 percent in May, compared with a 0.2 percent decline in April.

Analysts polled by Reuters had expected May producer inflation would pick up to 3.9 percent.

They also predicted that it will accelerate again in June as global crude oil prices continue to rise.

Raw material prices jumped 7.4 percent in May from a year earlier due to healthy demand from the steel sector and an easing of winter pollution curbs.

That compared with a 5.7 percent increase in April.

The higher factory-gate inflation helped to ease concerns of slowing momentum in the economy as the authorities implement tougher pollution controls on "smokestack" industries and cash-strapped regional governments cut back on big investment projects, curbing demand for building materials.

The rise could also provide a lift for earnings.

Chinese industrial firms' profits rose at their fastest pace in six months in April, with earnings for iron and steel processing firms jumping 260 percent.

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