Global| Jul 13 2007EMU Inflation Trends Show Success and Reason to be Wary…
Summary
The accompanying charts show those EMU countries for which we have an early read on June inflation. Finland, Belgium and France show rates of change below the 2% mark. Germany, Italy and The Netherlands are also below the 2% ceiling, [...]
The accompanying charts show those EMU countries for which we have an early read on June inflation. Finland, Belgium and France show rates of change below the 2% mark. Germany, Italy and The Netherlands are also below the 2% ceiling, but by the skin of their teeth. Luxembourg and Spain are over the top.
It is heartening to see that some of the larger countries have the lower rates of inflation. And for most the pattern is clear. An oil price shock cranked up the inflation rates, but afterward those rates have come back down and are for the most part tolerably closer to the ECB’s ceiling.
Still only France has an extended period in which its year/year pace has been consistently well below the ceiling pace of 2%. Finland’s and Belgium’s rates have just fallen into a more comfortable part of the zone recently. The Netherlands rate has recently risen toward the ceiling. While Germany and Italy are technical successes they have no reassuring history for us. Belgium and Luxembourg show no tendency to do better.
So it is quite understandable that the ECB would be wary in such an environment.
| % mo/mo | % saar | ||||||
| Jun-07 | May-07 | Apr-07 | 3-Mo | 6-Mo | 12-Mo | Yr Ago | |
| EMU-13 | #N/A | 0.2% | 0.4% | 3.0% | 2.4% | 1.9% | 2.5% |
| Core | #N/A | 0.2% | 0.3% | 3.1% | 2.5% | 1.9% | 2.4% |
| Goods | #N/A | 0.2% | 0.8% | 9.0% | 3.2% | 1.4% | 2.9% |
| Services | #N/A | 0.2% | 0.4% | 2.6% | 3.9% | 2.6% | 1.8% |
| HICP | |||||||
| Germany | 0.2% | 0.2% | 0.4% | 3.1% | 3.0% | 2.0% | 2.0% |
| France | 0.2% | 0.2% | 0.4% | 3.6% | 1.7% | 1.3% | 2.2% |
| Italy | 0.3% | 0.3% | -0.1% | 1.9% | 1.9% | 1.9% | 2.4% |
| UK | #N/A | 0.1% | 0.0% | #N/A | #N/A | #N/A | 2.5% |
| Spain | 0.3% | 0.3% | 0.3% | 3.4% | 3.3% | 2.4% | 3.9% |
| Core: xFE&A | |||||||
| Germany | #N/A | 0.3% | 0.3% | 2.0% | 2.2% | 2.1% | 0.6% |
| France | #N/A | 0.1% | 0.3% | 2.1% | 1.4% | 1.4% | 1.3% |
| Italy | #N/A | 0.2% | 0.0% | 2.0% | 1.8% | 1.9% | 1.7% |
| UK | #N/A | 0.3% | 0.0% | 2.4% | 2.2% | 2.2% | 1.3% |
| Spain | #N/A | 0.1% | 0.3% | 2.0% | 2.7% | 2.5% | 3.1% |
| Blue shaded area data trail by one month | |||||||
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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