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Economy in Brief
U.S. Housing Affordability Declines Further in June
The NAR Fixed Rate Mortgage Housing Affordability Index fell 3.6% in June...
EMU Output Makes Solid Gain in June
The European Monetary Union posted a 0.7% increase for industrial output in June...
U.S. Producer Prices Fall During July; Core Increase Weakens
The Producer Price Index for Final Demand fell 0.5% during July...
U.S. Unemployment Claims Continue on an Uptrend
Initial claims for unemployment insurance filed in the week ended August 6 rose 14,000 to 262,000...
RICS Survey Points to More U.K. Housing Sector Weakness
The survey of housing market conditions in the U.K. continues to show strength in prices versus weakness...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Louise Curley June 14, 2005
May Inflation rates in four European countries--France, Finland, Spain and the U.K. were released today. The consumer price index in the U.K. rose 1.9% continuing at the seven year high rate reached in March. In each of the Euro Zone countries the rate of inflation declined. In France from 1.9% in April to 1.6% in May, in Spain from 3.5% to 3.0% and in Finland from 1.2$ to 0.6%.
The contrast between inflation rates in the U.K. and in the Euro Zone as a whole is shown in the first chart. We have used the Flash Estimate series for the Euro Zone since it contains data for May while the overall index does not. The Flash Estimate series is a fairly good proxy for the actual series. The correlation between the two series is .86. (The actual May data for the overall index will be available on Thursday of this week.) In spite of its higher growth rate, the U. K. has had a lower inflation rate than the Euro Zone, but now the U. K. rate appears to be increasing while that in the Euro Zone is declining.
The rate of inflation within the Euro Zone has varied widely. Two of the countries reporting data today--Finland and Spain--represent two extremes and different trends in the rate of inflation as shown in the second chart. The trend in the relatively high rate of inflation in Spain appears to be stabilizing or decelerating, while the trend in the low rate of inflation in Finland shows some signs of increasing.
Year over Year Change in CPI | May 05 | Apr 05 | Mar 04 | Feb 05 | Jan 05 | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|---|---|
Euro Zone Flash Estimate | 2.00 | 2.10 | 2.10 | 2.00 | 2.10 | n.a. | n.a. | n.a. |
Euro Zone Overall Index | n.a. | 2.08 | 2.09 | 2.10 | 1.93 | 2.14 | 2.07 | 2.25 |
United Kingdom | 1.89 | 1.89 | 1.90 | 1.63 | 1.63 | 1.34 | 1.36 | 1.27 |
France | 1.63 | 1.91 | 1.91 | 1.73 | 1.46 | 2.13 | 2.14 | 1.88 |
Spain | 2.99 | 3.46 | 3.47 | 3.26 | 3.17 | 3.05 | 3.03 | 3.53 |
Finland | 0.62 | 1.15 | 0.88 | 0.00 | -0.14 | 0.14 | 1.30 | 2.01 |