Global| Aug 04 2009All Producer Prices in EMU Still Under Downward Pressure
Summary
EMU producer prices (x-construction) ticked up in June but are still falling at an accelerating pace Year-over-year. Sector prices are weak and falling across the board on all horizons but the rate of descent is not gathering momentum [...]
EMU producer prices (x-construction) ticked up in June but are
still falling at an accelerating pace Year-over-year. Sector prices are
weak and falling across the board on all horizons but the rate of
descent is not gathering momentum overall or by sector. In the end that
is the really good news.
Germany shows prices falling over three-months at about the
same pace they are falling over six months, both of which are at a
faster pace of decline than year-over-year. But core German prices,
Italian prices and UK prices, in particular, are not showing any
continuing deceleration: declines yes, but decelerations, no. In the UK
PPI prices have started to rise. In Italy the down turn has abated and
there is one month in which the PPI headline rate has risen (June).
German trends are marked by still declining headline and core rates
even monthly, but the move down is not accelerating.
In short inflation appears to be contained and deflation does
not seem to be in the cards on a sampling of big picture EMU sector
news and smattering of country-level reports. Lingering economic
weakness is probably having this extended impact in depressing prices.
| Euro Area and UK PPI Trends | ||||||
|---|---|---|---|---|---|---|
| M/M | Saar | |||||
| Euro Area | Jun-09 | May-09 | 3-Mo | 6-MO | Yr/Yr | Y/Y Yr Ago |
| Total excl Constructions | 0.2% | -0.2% | -4.5% | -7.8% | -6.7% | 7.9% |
| Capital Goods | 0.0% | -0.3% | -1.2% | -1.2% | 0.3% | 2.3% |
| Consumer Goods | -0.1% | 0.0% | -0.7% | -3.6% | -2.3% | 4.8% |
| Intermediate & Capital Goods | 0.0% | -0.4% | -5.2% | -9.4% | -6.4% | 4.3% |
| MFG | 0.5% | -0.1% | -0.4% | -5.0% | -7.4% | 7.2% |
| Germany | -0.1% | 0.0% | -9.4% | -9.8% | -3.3% | 5.1% |
| Germany excl Energy | -0.1% | -0.2% | -2.3% | -4.1% | -2.8% | 2.7% |
| Italy | 0.2% | -0.2% | -2.9% | -6.6% | -7.2% | 8.1% |
| UK | 1.1% | 0.5% | 1.5% | 2.1% | -8.6% | 24.1% |
| E-zone Harmonized PPI ex construction | ||||||
| The EA 13 countries are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia | ||||||
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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