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Economy in Brief

EMU PPI Edges Higher
by Robert Brusca  October 4, 2013

The EMU-wide PPI is now rising over three months; but it is still falling over six months and 12 months. Despite the fact that PPI's falling faster over six months than over 12 months it is advancing over the most recent three months. Intermediate goods prices continue to be under downward pressure. Consumer goods prices are gradually showing increasing upward pressure. The capital goods inflation remains very low, barely positive, in a stationary trajectory.

Looking at a selection of EMU countries we find a preponderance of countries with inflation falling over 12 months; only the UK and Ireland are exceptions. Over six months the group still shows declining prices with Ireland and the UK still an exception. Over three months prices are falling only in Italy and Austria. Elsewhere prices increase over three months.

Even though the year-over-year trends remain weak, it appears that the EMU region is putting its deflation behind it. As we see more indications of growth from the purchasing manager surveys for manufacturing and services, and from conventional economic indicators, incoming data continue to point toward an ongoing recovery in the European Monetary Union. The producer prices move in a positive territory is a supporting piece of evidence to this point of view.

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