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Economy in Brief

Inflation Continues to be too Strong in EMU in February
by Robert Brusca March 3, 2008

The new FLASH estimate of EMU inflation stands at 3.2% year/year in February 2008 the same pace as in January. Germany's own headline rate rose by 0.2% in February and that is the rate implied by the new 3.2% for all of EMU (no month/month rate is released but one can be calculated form the released data but with less overall precision). Even with flaring oil prices headline inflation is not accelerating over the sequential monthly rates. AT 2.5% the 3-month pace is much better than the 4.3% over six months and 3.2% year/year but still above the ECB’s desired ceiling of 2%. German inflation data which are up-to-date show the same dampening of inflation trends. Italy does not.

Trends in EMU HICP; Flash Index
  % month/month % saar
  Feb-08 Jan-08 Dec-07 3-Mo 6-Mo 12-Mo Yr Ago
EMU-13 0.2% 0.3% 0.2% 2.5% 4.3% 3.2% 1.9%
Core #N/A 0.1% 0.2% 2.5% 2.7% 2.3% 1.8%
Goods #N/A -0.5% 0.1% 2.0% 4.8% 3.7% 1.5%
Services #N/A -0.2% 0.9% 2.4% 0.4% 2.5% 2.3%
HICP              
Germany 0.2% 0.3% -0.2% 1.1% 3.9% 2.9% 2.0%
France #N/A 0.3% 0.4% 5.9% 4.6% 3.2% 1.4%
Italy 0.6% 0.1% 0.4% 4.2% 4.7% 3.1% 2.2%
Spain #N/A 0.2% 0.5% 6.5% 5.8% 4.4% 2.5%
Core:xFE&A            
Blue shaded area data trail by one month    
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