China's consumer price index rebounded in August, and producer-price inflation — a gauge of prices factories charge each other — also regained momentum during the month, according to data released this week.
The readings matter because China has spent much of the past two years fighting deflation, with falling factory-gate prices squeezing corporate profits and discouraging investment. A pickup in both gauges at once suggests demand and pricing power may be stabilizing, though the reports do not specify by how much each index moved.
What's unresolved is whether the improvement holds into September or reflects temporary factors such as commodity price swings feeding into producer costs.