Global| Aug 25 2008Spain's PPI Surges
Summary
Not that SPAIN is an inflation bellwether but a 23-year high is a 23-year high -- Soaring energy costs sent Spanish producer price inflation to a 23 ˝ year high of 10.1 percent in July. Many are calling this the peak in inflation. [...]
Not that SPAIN is an inflation bellwether but a 23-year high is a 23-year high -- Soaring energy costs sent Spanish producer price inflation to a 23 ½ year high of 10.1 percent in July. Many are calling this the peak in inflation. With energy prices as the culprit and world energy prices having moved off-peak, that bet seems a good one. Inflation in Spain, as in the rest of Europe, has been propelled by a 30 percent rise in energy prices. In July the headline rate was the greatest annual increase since November 1984 and it compared with a 9 percent rate of increase in June. Producer prices rose 1.3 percent month on month, compared to 1.4 percent in June. Since July lower consumer goods demand and a housing and credit crisis add to lower world oil prices as reasons for Spain’s inflation rate to abate.
Still e-Zoners have their lingering concerns. In Jackson Hole Wyoming as the KC Fed’s conference disbanded, Italy’s central back head Mario Draghi warned that if central banks became too preoccupied with financial stability they could lose their grip on inflation. Draghi argued that price stability was the true key to getting economies back on track. Clearly central bankers have a lot on their minds in addition to what is on their plates.
| Spain PPI | |||||||
|---|---|---|---|---|---|---|---|
| m/m | Saar | ||||||
| SPAIN | Jul-08 | Jun-08 | May-08 | 3-Mo | 6-Mo | Yr/Yr | Y/Y Yr Ago |
| Total | 1.3% | 1.4% | 1.2% | 16.3% | 11.1% | 10.1% | 2.3% |
| Consumer | 0.1% | 0.4% | 0.2% | 15.4% | 2.9% | 5.2% | 1.9% |
| Intermediate | 1.3% | 0.8% | 0.4% | 10.1% | 9.2% | 7.3% | 5.5% |
| Investment | 0.3% | 0.1% | 0.2% | 2.4% | 2.1% | 2.3% | 3.1% |
| HIPPXConstruction | #N/A | 1.4% | 1.1% | #N/A | #N/A | #N/A | 2.3% |
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.
