· French producer prices again are showing over-the-top inflation. The three-month overall rate is a 4.2% pace but that represents some deceleration from 6.6% over six months and it is below the 5.5% Yr/Yr rate. Still, inflation is up sharply from its year ago annual rate of 2.1%. And, in the quarter-to-date the overall PPI rate is still up at a 6% annual rate. The chart shows the halting roller coaster that French PPI inflation has been riding. 

· Consumer prices at the producer level have stayed subdued throughout, partly because consumer demand has been slack. Intermediate prices are running up strongly with all the increases in energy metals and other commodity prices. Investment goods, which have been in the booming sector in Europe, have generally kept price tends in check. But investment goods prices have accelerated slightly over three-months and at 1.4% are moderate. Core PPI inflation has reversed a declining trend and accelerated to 2.6% over three-months. At 1.8%, its Yr/Yr pace is still under the overall inflation ceiling desired by the ECB- a ceiling that formally refers only to the HICP but is applicable up and down the inflation transmission line. 

France PPI

m/m

Saar

France

Mar-08

Feb-08

Jan-08

3-Mo

6-Mo

Yr/Yr

Y/Y Yr Ago

Qtr-2-Date

Total

0.3%

0.3%

0.5%

4.2%

6.6%

5.2%

2.1%

6.0%

Consumer

0.2%

0.0%

-0.3%

-0.4%

-0.2%

0.4%

-0.3%

-1.2%

Intermediate

0.3%

0.7%

0.5%

6.0%

2.9%

3.2%

4.7%

4.7%

Investment

-0.1%

0.1%

0.4%

1.5%

1.1%

1.2%

2.6%

1.5%

PPI excl  Food and Energy

0.1%

0.4%

0.2%

2.6%

1.6%

1.8%

2.7%

2.1%