More signs that China's economy is cooling off have come in today with the government reporting that both consumer and producer prices have hit their lowest level in years.

The relatively low consumer and producer price levels indicate soft domestic demand, falling commodity prices, weak manufacturing activity and lingering overcapacity in the Chinese economy, analysts told Xinhua, China's state-owned news agency.

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China's consumer price index (CPI), which is how a country gauges its rate of inflation, grew 1.6 percent in October, compared to the same month last year, the National Bureau of Statistics (NBS) said in a statement on Monday. That's its lowest level since January 2010.

On a monthly basis, the October inflation index was unchanged from the previous month, compared with September's 0.5-percent increase, according to NBS data. The inflation rate was in line with the consensus forecast, and was the same as that of September, which was

For the first 10 months, inflation grew 2.1 percent year on year, which is on pace to fall short of the Chinese government's full-year target of 3.5 percent.

In October, the price of gasoline and diesel fell 5.6 percent and 7.8 percent from the same month last, respectively. Month-on-month growth in transportation and communication prices was also weaker.

Inflation has been low not only for consumers, but producers and factories as well. The producer price index (PPI), which measures inflation at the wholesale level, fell for the 32nd consecutive month, and at a faster pace than it had in September. It was down 2.2 percent compared to the same month last year, which was more than had been expected.

Japan-based Nomura Securities also said in a report that falling global commodity prices and worsening overcapacity due to the ongoing property market correction could be major factors contributing to the PPI deflation, reports Xinhua.

Tagsinflation, China's inflation, 4-year low, 5-year-low, factory contraction, consumer price index, Producer Price Index