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Economy in Brief

German PPI: Oh, BEHAVE! …and it does
by Robert Brusca January 21, 2008

The German PPI was flat in December after a 0.9% surge in November. The ex energy PPI rose by 0.1% after rising by 0.1% in November and by 0.2% in October. No sign of second round effects here.

While the EBC is worried about building pressures in the monetary union this evidence of a break in inflation in Germany at the PPI level is good news. It is not surprising that the PPI, an index that should be more susceptible to the impact of the strong euro, is staying in line even with the reverberations of the spiking oil prices vibrating through it. The news is good news but it is not decisive. The price indexes that the ECB cares most about are the broader ones, especially the HICP. But this news is at least hopeful on the inflation front and good news there has been lacking lately.

Germany PPI
  %m/m %-SAAR
  Dec-07 Nov-07 Oct-07 3-mo 6-mo 12-mo 12-moY-Ago
MFG 0.0% 0.9% 0.3% 5.1% 2.9% 2.5% 4.3%
Ex Energy 0.1% 0.1% 0.2% 1.4% 1.6% 2.2% 2.9%
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