AsianFin -- China’s consumer prices fell at their quickest rate in six months in August, even as producer deflation showed signs of easing, highlighting both the persistent drag from weak household demand and tentative progress in stabilizing industrial sectors.

The consumer price index dropped 0.4% year-on-year, data from the National Bureau of Statistics showed Wednesday. That was steeper than the 0.2% decline expected by economists in a Reuters poll and followed flat prices in July. Food prices were a major drag, tumbling 4.3% compared with a 1.6% decline a month earlier.

On the production side, the producer price index fell 2.9% in August from a year earlier, easing from July’s 3.6% decline and in line with consensus forecasts. Authorities have recently urged industries, from autos to electronics, to rein in aggressive discounting after a prolonged price war battered automakers’ margins and dragged on profitability across the supply chain.

Factory-gate prices in China have been stuck in deflation for nearly three years, eroding earnings for manufacturers already grappling with lackluster consumer sentiment at home and trade pressures from the U.S.

The figures underscore the challenges Beijing faces in shoring up confidence as property market woes linger, household spending remains subdued, and exporters contend with elevated U.S. tariffs.