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Economy in Brief

Italy's Inflation Rates Show Turn of Trend
by Robert Brusca February 23, 2009

Italy’s headline HICP inflation rate fell by 0.6% in January. Its domestic inflation measure fell by 0.2%. Both series show that inflation has dropped sharply. The Yr/Yr pace for the HICP, or harmonized rate, is 1.4% down from 3.2% a year ago at this time. The domestic rate at 1.6% is down from 3% one year ago.

Our diffusion calculations (see table above) show that over three-months and six-months inflation has been decelerating across more sectors that it has been accelerating (a value of 50 is neutral; below that inflation is decelerating in more sectors than it is accelerating). The deceleration noted by the diffusion indices is pronounced. It is not just due to a drop in energy prices.


Italy HICP and CPI details
  Mo/Mo % Saar % Yr/Yr
  Jan-09 Dec-08 Nov-08 3-Mo 6-Mo 12-Mo Yr Ago
HICP Total -0.6% 0.0% -0.5% -4.0% -0.9% 1.4% 3.2%
Core #N/A 0.2% 0.1% #N/A #N/A #N/A 2.5%
CPI
All -0.2% -0.1% -0.4% -2.6% -0.9% 1.6% 3.0%
Food 0.0% 0.0% 0.1% 0.3% 1.6% 3.8% 4.5%
Alcohol -0.3% 0.3% 0.3% 1.1% 3.1% 3.2% 4.5%
Clothing & Shoes 0.1% 0.1% 0.1% 1.5% 1.5% 1.6% 1.6%
Rent &Util -0.9% 0.2% -0.3% -3.7% -1.1% 4.1% 4.0%
Housing &Furniture 0.2% 0.2% 0.0% 1.5% 2.3% 2.2% 3.7%
Health Care 0.2% 0.1% 0.0% 1.3% 1.7% 0.8% 0.7%
Transport -0.7% -1.0% -2.1% -14.5% -9.0% -1.5% 5.5%
Communication -0.4% 0.1% -0.1% -1.8% -4.0% -3.2% -8.5%
Rec &Culture -0.2% 0.1% 0.1% 0.0% -1.0% 0.6% 0.7%
Education 0.1% 0.1% 0.1% 1.7% 1.9% 2.2% 2.3%
Restaurant & Hotel -0.3% 0.0% 0.2% -0.3% 0.5% 1.9% 2.5%
Other 0.2% 0.2% -0.1% 1.4% 2.5% 2.5% 3.0%
Diffusion -- -- -- 16.7% 16.7% 33.3% --
Type: Diffusion: Compared to 6-mo 12-mo Yr-Ago --
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