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Economy in Brief
U.S. Energy Prices Rise Further
Retail gasoline prices increased to $4.59 per gallon in the week ended May 23...
S&P Flash PMIs Are Mixed in May As Manufacturing Erodes Slowly
Among the early reporting countries in Europe and Japan, the S&P PMI readings for May tilt toward weakness...
NABE Lowers Growth Expectations for Next Year & 2022
The NABE expects the economic expansion to continue through its third year...
Chicago Fed National Activity Index Improves in April
The Chicago Fed National Activity Index (CFNAI) rose to 0.47 during April...
IFO Registers Small Rebound on the Month
Germany's IFO index has rebounded on the month...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits & Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Robert Brusca September 4, 2007
The EMU ex-energy PPI inflation rate is excessive. It is up by 0.2% in the month and at a 2.4% pace over three-months. Still over six-month its pace had been 3.2%. That deceleration is a hopeful sign, but it still leaves the pace of the PPI above the Yr/Yr inflation rate of 2.9%. In any event the ECB inflation guideline is for inflation below 2%; having the PPI running at a pace in excess of that is not helpful.
All main sectors three-month inflation rates are above the 2% ceiling except for capital goods. The overall pace of ex-energy inflation is 2.4% for three months and 2.9% Yr/Yr. For Germany and Italy ex energy inflation is lower Yr/yr compared to the year previous period and the 3-month inflation rates each are lower that their respective six month counterpart rates. In the UK Yr/Yr ex-energy inflation is steady at 3% but over three months ex-energy inflation is lower at 2.5%.
The situation for W. Europe seems to be that inflation is on its way to behaving if only at a slow pace. Still that is something and with the weakness and concerns about subprime and the financial sector that just might be enough to help to keep the ECB’s next rate hike at bay.
| M/M | SAAR | |||||
| Euro area 13 | Jul-07 | Jun-07 | 3-Mo | 6-MO | Yr/Yr | Y/Y Yr Ago |
| Total ex Construction | 0.3% | 0.1% | 2.8% | 3.7% | 1.8% | 6.0% |
| Excl Energy | 0.2% | 0.1% | 2.4% | 3.2% | 2.9% | 3.5% |
| Capital Goods | 0.1% | 0.0% | 0.6% | 1.1% | 1.7% | 1.6% |
| Consumer Goods | 0.3% | 0.2% | 2.8% | 2.6% | 1.8% | 1.9% |
| Intermediate & Capital Goods | 0.1% | 0.1% | 2.2% | 3.5% | 3.5% | 4.3% |
| Energy | 0.5% | -0.1% | 4.3% | 5.6% | -1.9% | 14.8% |
| MFG | 0.3% | 0.2% | 4.1% | 5.6% | 2.3% | 4.3% |
| Germany | -0.1% | 0.2% | 1.7% | 2.0% | 1.1% | 6.0% |
| Germany ex Energy | 0.1% | 0.2% | 1.8% | 2.8% | 2.4% | 3.0% |
| France | #N/A | 0.2% | #N/A | #N/A | #N/A | 4.0% |
| France ex Energy | #N/A | 0.1% | #N/A | #N/A | #N/A | 2.9% |
| Italy | 0.4% | 0.1% | 3.7% | 4.6% | 2.1% | 7.0% |
| Italy ex Energy | 0.3% | 0.1% | 2.8% | 3.3% | 3.2% | 4.0% |
| UK | 0.6% | 0.6% | 5.9% | -1.6% | 0.4% | 9.8% |
| UK ex Energy | 0.4% | 0.1% | 2.5% | 3.3% | 3.0% | 3.0% |
| Euro area 13 Harmonized PPI excluding Construction. | ||||||
| The Euro area 13 countries are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and Slovenia. | ||||||
