September 10, 2019 / 1:42 AM / 12 days ago

China producer prices shrink most in 3 years in August

BEIJING, Sept 10 (Reuters) - China’s factory gate prices contracted for the second month in August and at a sharper rate, reinforcing the urgency for Beijing to step up stimulus as a deepening trade war with the United States heaps pressure on its manufacturing sector and the broader economy.

The producer price index (PPI), a key barometer of corporate profitability, dropped 0.8% from year earlier in August, National Bureau of Statistics (NBS) said.

It was the worst year-on-year contraction since August 2016, when it fell 0.8%.

Analysts polled by Reuters had expected factory gate inflation to have shrunk 0.9% year-on-year last month, following a 0.3% decline in July.

The consumer price index (CPI) rose 2.8% in August on-year, unchanged from July. That compared with a 2.6% increase predicted by analysts. (Reporting by Beijing Monitoring Desk; Editing by Kim Coghill)

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