Global| Oct 02 2003Euro-Zone PPI Up 0.2% in August, Index ex-Energy Is Flat
Summary
Producer prices in the Euro-Zone rose 0.2% from July to August, following a 0.1% move the month before. August compared to a year ago is up 1.4%, extending approximately that yearly pace through a fourth month. The month-to-month [...]
Producer prices in the Euro-Zone rose 0.2% from July to August, following a 0.1% move the month before. August compared to a year ago is up 1.4%, extending approximately that yearly pace through a fourth month.
The month-to-month increase in August was accounted for by energy prices, which were up 1.2 from July. Excluding that segment, the total PPI was flat, including unchanged levels for capital goods and durable consumer items. The largest advance was in the Netherlands, 1.3%, but that reversed a similar magnitude fall in July. Portugal experienced a 0.3% rise, and most other countries experienced the 0.2% increase of the overall total.
The accompanying graph suggests that the Euro exchange rate exerts some influence on these wholesale prices. The PPI excluding energy is plotted with a broad, trade-weighted Euro index. Shifts in that widely defined exchange rate appear to presage by several months a turn in the trend of wholesale prices. Thus, even though these are purely domestic prices, covering goods traded only within local markets, that is, excluding imports, they are seen to follow moves in exchange rates, as might be expected with such open economies. This pattern hints that continuation of the recent softer tone in the euro would foster an uptrend in these producer prices.
| Euro-Zone Industrial Producer Prices, % Changes | Aug 2003 | July 2003 | June 2003 | Y/Y % |
2002 | 2001 | 2000 |
|---|---|---|---|---|---|---|---|
| (Dec/Dec) | |||||||
| All industry ex construction | 0.2 | 0.1 | -0.3 | 1.4 | 1.6 | -0.7 | 5.3 |
| All industry ex construction & energy | 0.0 | -0.1 | -0.1 | 0.6 | 1.1 | 0.3 | 3.0 |
| Energy | 1.2 | 0.7 | 0.5 | 4.5 | 3.9 | -5.8 | 14.4 |
| Euro Exchange Rate* | -1.1 | -1.4 | 0.2 | 9.2 | 9.3 | 4.2 | -4.4 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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