Global| Jan 21 2009German PPI Points To Lower Inflation Ahead
Summary
Germany’s PPI for manufactured goods fell by 0.8% in December and is falling at an accelerated rate along with its ex-energy measure. In the fourth quarter MFG producer prices fell at a 4% pace compared to ex–energy prices that fell [...]
Germany’s PPI for manufactured goods fell by 0.8% in December
and is falling at an accelerated rate along with its ex-energy measure.
In the fourth quarter MFG producer prices fell at a 4% pace compared to
ex–energy prices that fell at a 3.2% pace. Price weakness is
broad-based. The chart above highlights the ongoing weakness in
consumer and intermediate goods prices. Capital goods prices are not
yet showing much in the way of decline. But in orders data, capital
goods orders are declining and orders are falling on a broad front.
Prices may be more resilient for capital goods but that is not a sign
of economic health. It may be a sign of the longer lags in producing
capital goods. As such the price weakness may not show up for several
months more.
| Germany PPI | ||||||||
|---|---|---|---|---|---|---|---|---|
| %m/m | %-SAAR | |||||||
| Dec-08 | Nov-08 | Oct-08 | 3-mo | 6-mo | 12-mo | 12-moY-Ago | IN Q4 | |
| MFG | -0.8% | -1.0% | -0.2% | -7.8% | 0.0% | 4.4% | 2.4% | -4.0% |
| Ex Energy | -0.4% | -0.6% | -0.3% | -5.4% | -0.7% | 1.5% | 2.2% | -3.2% |
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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