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Economy in Brief

EMU PPI on an Accelerating Trend…
by Robert Brusca November 6, 2007

The ex-energy PPI is not showing the same acceleration as the headline and is in fact decelerating across the main countries except for the UK, an EU country. If we look at the sequential growth rates by product in the table we find that most categories are showing price deceleration as well. Capital goods are a minor exception. Consumer goods show a more pronounced acceleration in inflation. Overall EMU inflation is decelerating excluding energy to 2.7% over three months from 3.1% over six months and 3% year-over-year. At a 2.7% pace it still is well over the 2% inflation ceiling for the HICP that has been set by the ECB. Among main PPI components only intermediate goods inflation is below 2% over three months. Germany posts 3-month PPI inflation that is below 2% for both overall and ex-energy measures in September.

Euro area and UK PPI Trends
  M/M Saar
Euro area 13 Sep-07 Aug-07 3-Mo 6-MO Yr/Yr Y/Y Yr Ago
Total ex Construction 0.4% 0.1% 2.9% 3.3% 2.7% 4.6%
Excl Energy 0.2% 0.3% 2.7% 3.1% 3.0% 3.6%
Capital Goods 0.1% 0.0% 1.0% 0.9% 1.6% 1.7%
Consumer Goods 0.5% 0.5% 5.8% 4.2% 2.9% 1.7%
Intermediate & Capital Goods 0.1% 0.1% 1.3% 2.6% 3.1% 4.6%
Energy 1.0% -0.5% 3.5% 4.2% 1.6% 7.8%
MFG 0.4% 0.1% 3.3% 4.6% 3.4% 2.8%
Germany 0.2% 0.1% 0.7% 1.5% 1.5% 5.1%
Ex Energy 0.0% 0.3% 1.5% 2.4% 2.5% 2.8%
Itlay 0.5% 0.2% 4.4% 4.2% 3.5% 5.5%
Ex Energy 0.1% 0.3% 2.1% 2.8% 3.1% 4.1%
UK 0.5% 0.0% 4.5% -0.6% 2.6% 6.2%
Ex Energy 0.2% 0.2% 2.9% 2.1% 2.9% 3.1%
Euro area 13 Harmonized PPI excluding Construction      
The EA 13 countries are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain.
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