Consumer prices have jumped the most in more than two years

China’s consumer prices rose in September at their fastest pace in more than two years as pork prices soared, the National Bureau of Statistics said Friday.

The consumer price index increased 2.8% last month from a year ago, matching expectations of a Reuters poll.

That was the fastest pace since a 3.3% year-over-year increase in April 2020, according to Wind Information.

Wind data showed that much of the gain came from the continued rise in pork prices, which rose 36% year-on-year to mark the biggest rise since August 2020. Pork, a staple food in China, has a significant weight in the country’s official CPI.

However, other indicators pointed to declining consumer demand.

Excluding food and energy, core CPI rose just 0.6% from a year ago — the slowest pace since March 2021, according to Wind.

China’s producer price index rose 0.9% in September from a year ago, missing a Reuters estimate of 1%. The index grew at its slowest rate since January 2021, according to The Wind Company.

Bruce Pang, chief economist and head of research, Greater China, JLL, said weak core CPI and a disappointing slowdown in China’s PPI reflect weak Chinese consumer demand and sluggish external demand.

He said the PPI is expected to decline further and may enter negative territory in the coming months.