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Economy in Brief

by Robert Brusca German PPI Flattens Out July 10, 2007

The German PPI has slowed and now has its Yr/Yr pace below 2% at 1.9%. But excluding energy, price trends, as improved as they are, still are not favorable.

Since sector prices are not seasonally adjusted we also look at a sequence of Yr/Yr calculations by sector to discern trends. On that basis German inflation is not progressing. In the upper panel where data are seasonally adjusted the trends also have stopped declining for PPI excluding energy and PPI excluding construction. On top of that there is a more stubborn trend in services inflation to deal with. While the German WPI was portrayed as good headline report it is also not good enough.

German Wholesale Prices
  May-07 Apr-07 Mar-07 3-Mo 6-Mo 12-Mo
Total 0.3% 0.1% 0.2% 2.4% 1.5% 1.9%
Total excl Energy 0.2% 0.4% 0.1% 2.6% 2.2% 2.6%
Total excl Construction 0.6% -0.2% 0.1% 1.9% 1.0% 1.9%
          Yr/Yr Rates
NSA Yr/Yr 3-Mo Ago 6-Mo Ago Yr/Ago
Total 1.9% 1.6% 2.5% 2.8% 4.7% 6.2%
Consumer 1.7% 1.7% 1.7% 1.8% 1.4% 1.6%
Investment 1.2% 1.1% 1.2% 1.2% 1.1% 0.5%
Intermediate 4.8% 5.3% 5.5% 5.5% 5.6% 4.2%
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