Chinese inflation eases, leaves room for stimulus

BEIJING (AP) - China's inflation eased in October, leaving room for Beijing to stimulate its slowing economy if necessary.

Consumer prices rose 1.3 percent over a year earlier, down from September's 1.6 percent, government data showed Tuesday. That was driven mostly by a 1.9 percent increase in food costs.

Lower inflation leaves room for Beijing to cut interest rates or take other steps to stimulate its cooling economy after growth weakened to a six-year low of 6.9 percent in the latest quarter.

October trade was unexpectedly weak, raising expectations Beijing might face more pressure to shore up growth, though Chinese leaders have said they want to avoid an across-the-board stimulus.

Producer prices, measured as goods leave the factory, declined further in October, falling 5.9 percent compared with a year earlier.

Wholesale prices have fallen for several years due to a glut of excess production capacity in many industries. That has helped to hold down consumer prices but raised concern about the financial health of companies that are caught in price-cutting wars.