Global| Feb 26 2010EMU Inflation Stays Under Wraps
Summary
The EMU HICP has finalized for January. Headline prices fell and core prices ( ex energy and unprocessed food) fell by 0.3%. Core prices continue to drive their Yr/Yr rate lower to juts under 1%. Goods prices in the Zone are up by [...]
The EMU HICP has finalized for January. Headline prices fell and core prices ( ex energy and unprocessed food) fell by 0.3%. Core prices continue to drive their Yr/Yr rate lower to juts under 1%. Goods prices in the Zone are up by 0.7% Yr/Yr while service prices are up 1.4%.over three months goods prices are falling.
EMU inflation among the large countries is fairly tightly clustered. German inflation is 0.7% over 12-months and marks the low while Italy at 1.3% over 12-months marks the high. The UK, a non monetary union country, but an EU member has headline inflation at 3.5% for 12-months.
Core inflation is clustered in the Union as well. Spain at 0.3% has the lowest Core rate over twelve months. Germany and France are both at 0.9%. Italy at 1.5% has the highest core rate.
Over three and six months headline inflation in the Zone is well-behaved while UK inflation continues to bulge, running up by as much as a 6.2% at an annual rate over three months.
In the Zone core inflation is universally low over three months; the large country with the lowest core inflation rate is Germany at -0.7%, over six months Italy has the high at 1.9%
Inflation in the Zone is weak and economic activity has been weakening. Weather has been severe in the US in Europe and it has hit the UK hard in a few places. It is hard to know the role of weather in blunting the forces of growth. For now central banks can take some breathing room on the inflation front. Growth however has yet to turn the corner in a strong dependable way.
| Trends in HICP | |||||||
|---|---|---|---|---|---|---|---|
| % mo/mo | Saar | ||||||
| Jan-10 | Dec-09 | Nov-09 | 3-Mo | 6-Mo | 12-Mo | Yr Ago | |
| EMU | -0.1% | 0.2% | 0.2% | 1.4% | 2.2% | 1.0% | 1.1% |
| Core | -0.3% | 0.1% | 0.0% | -0.4% | 0.4% | 0.9% | 1.8% |
| Goods | -0.9% | -0.1% | 0.4% | -2.4% | 1.4% | 0.7% | 0.2% |
| Services | -0.5% | 0.8% | -0.2% | 0.3% | -0.7% | 1.4% | 2.4% |
| HICP | |||||||
| Germany | 0.1% | 0.1% | 0.2% | 1.5% | 1.7% | 0.7% | 0.9% |
| France | 0.2% | 0.3% | 0.2% | 2.5% | 2.5% | 1.2% | 0.8% |
| Italy | -0.3% | 0.3% | 0.2% | 0.7% | 2.0% | 1.3% | 1.5% |
| UK | 0.9% | 0.4% | 0.3% | 6.2% | 4.4% | 3.5% | 3.0% |
| Spain | 0.0% | 0.2% | 0.5% | 2.7% | 2.4% | 1.1% | 0.8% |
| Core:xFE&A | |||||||
| Germany | -0.3% | 0.2% | -0.1% | -0.7% | 0.2% | 0.9% | 1.2% |
| France | -0.2% | 0.2% | 0.0% | 0.1% | 0.3% | 0.9% | 1.6% |
| Italy | -0.5% | 0.3% | 0.2% | 0.0% | 1.9% | 1.5% | 2.1% |
| UK | #N/A | 0.2% | 0.2% | #N/A | #N/A | #N/A | 1.8% |
| Spain | -0.3% | 0.1% | 0.1% | -0.1% | 0.0% | 0.3% | 1.9% |
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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