The National Bureau of Statistics released data showing that in July, the effect of the policy of expanding domestic demand continued to emerge, and prices in the consumer sector continued to show positive changes. The Consumer Price Index (CPI) for residents changed from a decrease of 0.1% last month to an increase of 0.4% month on month; Same as last year. The core CPI, which excludes food and energy prices, increased by 0.8% year-on-year, with the growth rate expanding for three consecutive months. The Producer Price Index (PPI) for industrial producers decreased by 0.2% month on month, narrowing the decline by 0.2 percentage points compared to the previous month, marking the first time since March that the month on month decline has narrowed; A year-on-year decrease of 3.6%, the same decrease as last month. In July, CPI rose month on month, with an increase of 0.1 percentage points higher than the seasonal level. Dong Lijuan, Chief Statistician of the Urban Department of the National Bureau of Statistics, analyzed that the month on month increase was mainly driven by the rise in prices of services and industrial consumer goods. The service price increased by 0.6% month on month, affecting the CPI by about 0.26 percentage points, accounting for more than 60% of the total CPI increase. The policy of boosting consumption has driven sustained demand recovery, coupled with the end of the "6.18" promotion campaign, resulting in a 0.2% increase in industrial consumer goods prices excluding energy. The CPI remained unchanged year-on-year, mainly due to the impact of lower food prices. Affected by a relatively high price base in the same period last year, food prices decreased by 1.6% year-on-year, resulting in a year-on-year decrease of approximately 0.29 percentage points in CPI. The core CPI, which excludes food and energy prices, increased by 0.8% year-on-year, the highest since March 2024. Among them, the prices of gold jewelry and platinum jewelry increased by 37.1% and 27.3% respectively year-on-year; Service prices increased by 0.5% year-on-year; The prices of gasoline cars and new energy cars decreased by 2.6% and 1.9% respectively year-on-year, with the smallest decline in nearly 34 months and 28 months, respectively. Wen Bin, Chief Economist of China Minsheng Bank, believes that since the beginning of this year, the core CPI has continued to rise, reflecting the gradual improvement of market supply and demand with the sustained effectiveness of policies to expand domestic demand and promote consumption, and the further smoothness of the domestic economic cycle. In July, PPI decreased by 0.2% month on month, narrowing the decline by 0.2 percentage points compared to the previous month. Dong Lijuan stated that seasonal factors combined with uncertainty in the international trade environment have led to price declines in some industries. The increase in hot and rainy weather in summer has slowed down the construction progress of building projects, affecting the demand for building materials. On the other hand, in some areas, the abundant river water has significantly increased the complementary and substitute role of hydropower in thermal power generation, resulting in a decrease in demand for coal. As a result, prices in the non-metallic mineral products industry, black metal smelting and rolling processing industry, coal mining and washing industry, electricity and heat production and supply industry have all decreased month on month. Under the uncertainty of the international trade environment, prices in the computer communication and other electronic equipment manufacturing industry, automobile manufacturing industry, electrical machinery and equipment manufacturing industry, and general equipment manufacturing industry have decreased month on month. With the continuous and timely strengthening of macro policies, the supply-demand relationship in some industries has improved, and prices have shown positive changes. The transformation and upgrading of traditional industries and the management of production capacity in key industries are gradually advancing, while emerging industries are growing rapidly, and prices in related industries have rebounded year-on-year. At the same time, the special action to boost consumption has been deeply implemented, and the consumer market continues to develop healthily. The increase in demand for upgraded consumption has driven up prices in some industries year-on-year. The month on month trend of prices reflects more seasonal and short-term changes and fluctuations, while the year-on-year trend reflects more long-term, trending, and structural changes. ”Pang Ming, a specially appointed senior researcher at the National Finance and Development Laboratory, believes that based on PPI data, the month on month decline in PPI has continued to stabilize and improve in recent months, reflecting various positive changes such as policy effectiveness, industrial structure optimization and adjustment, establishment of sound competition order, and gradual increase in domestic demand. Wen Bin believes that recent statements and measures from various parties indicate that "anti involution" will become a policy focus in the second half of the year. In the short term, 'anti involution' reshapes the supply and demand structure of industries from the supply side, especially for industries with overcapacity and low profit margins. By optimizing resource allocation, improving the overall efficiency of the industrial chain, alleviating supply and demand contradictions, and promoting prices to return to a reasonable range. In the medium to long term, there is still strong uncertainty about whether prices can continue to rise, which mainly depends on the implementation and coordination of policies. The 'anti internal competition' is more about creating a window period for price repair. Whether the virtuous cycle of 'improving corporate profits and enhancing endogenous economic power' can be truly achieved depends on whether domestic demand can be effectively boosted. (New Society)