Global| Nov 04 2010PPI Rises Strongly In Sept; Trend Is Still Tame
Summary
The Euro-Area PPI spurted in September. But as the August PPI had been flat there is no acceleration in three-month growth rate after the September 0.5% spurt in the headline. None of the main PPI categories show three-month inflation [...]
The Euro-Area PPI spurted in September. But as the August PPI had been flat there is no acceleration in three-month
growth rate after the September 0.5% spurt in the headline. None of the main PPI categories show three-month inflation
acceleration either. Indeed, quite the opposite: sequential inflation rates continue to point lower for headline inflation.
For the main sectors, the three-month rate of inflation resides below both the year-over-year pace.
At the country level inflation patterns are a bit less reassuring. In Germany, the Euro-Area’s strongest economy, ex-energy inflation is higher over three-months than over 12-months. In France ex energy inflation rates are steadily decelerating. In Italy and the UK inflation over three months is lower than over 12-months. But for the UK in particular the three-month pace is still high.
But of course PPI inflation is far more volatile than CPI inflation as the graph reveals. So a pace of inflation that seems uncomfortable from a CPI perceptive may not prove to be so worrisome if it is the pace at the PPI level. For the time being PPI inflation rates are slightly elevated year over but the trends within the PPI are not worrisome.
| Euro-Area and UK PPI Trends | ||||||
|---|---|---|---|---|---|---|
| M/M | SAAR | |||||
| Euro-Area | Sept-10 | Aug-10 | 3Mo | 6MO | Yr/Yr | Y/Y Yr Ago |
| TotalxConstruct | 0.5% | 0.0% | 2.0% | 2.6% | 4.2% | -7.7% |
| Capital Gds | 0.0% | 0.1% | 0.4% | 1.2% | 0.7% | -0.4% |
| Consumer Gds | 0.1% | 0.1% | 1.0% | 1.3% | 0.8% | -2.8% |
| Intermediate | 0.7% | 0.2% | 3.3% | 5.4% | 5.0% | -7.5% |
| MFG | 0.6% | 0.4% | 2.3% | 1.7% | 3.9% | -6.9% |
| Germany | ||||||
| Gy ExEnergy | 0.4% | 0.4% | 3.4% | 4.0% | 2.8% | -3.3% |
| France:Tot | ||||||
| Fr ExF&Energy | 0.2% | 0.2% | 0.0% | 1.3% | 1.9% | -3.8% |
| Italy | 0.7% | 0.3% | 2.6% | 1.5% | 4.1% | -7.5% |
| UK | 0.5% | 0.3% | 3.8% | 2.4% | 4.5% | 0.4% |
| Euro-Area Harmonized PPI ex construction | ||||||
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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