Overview
- Consumer prices rose 0.8% year over year in December and 0.2% from the prior month, with the monthly gain beating forecasts.
- Producer prices fell 1.9% from a year earlier, extending a factory-gate deflation streak of more than three years and highlighting fragile pricing power.
- Core inflation held at 1.2% year over year, indicating underlying price pressures remain modest despite the headline pickup.
- Policy signals point to potential targeted easing such as lower mortgage rates and looser home-purchase rules after a Party journal urged a stronger, comprehensive real estate package.
- Activity indicators are mixed, with the official manufacturing PMI edging back to 50.1 in December as industrial profits slid 13.1% in November and economists see fourth-quarter growth near 4.5%.