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CPI Details Show Disinflation Tapering Off for High-Rate Items (1/2)

GERMAN DATA
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German final June HICP was unrevised from the flash readings at +2.5% Y/Y(+2.8% May) and +0.2% M/M (+0.2% May). The final reading of CPI was also unrevised at +2.2% Y/Y (+2.4% May) and +0.1% M/M (+0.1% May). Core CPI printed at +2.9% Y/Y (+3.0% May), the lowest since February 2022.

  • Overall, the data confirms the main conclusions from the flash reading - services remain sticky and momentum in the next months will be subject to uncertainty.
  • The final major CPI components were unchanged from the flash estimates: goods prices printed at +0.8% Y/Y (+1.0% May), services unchanged at 3.9% (+3.9% May).
  • Developments within the services subcategories were mixed, as projected by MNI after state-level data: While transport and recreation and culture inflation decelerated (+1.6% Y/Y vs +2.6% May and +1.4% vs +1.8%, respectively), healthcare came in at +2.9% (+2.7%), hospitality at +6.5% (+6.3%), and education at +4.9% (+4.9%). Insurance inflation meanwhile declined a bit from its all-time high, to +12.3% Y/Y (vs +13.0%; transport insurance noteworthy at +26.0%).
  • High-volatility items also were a bit mixed: Airfares -6.0% (vs +7.7% May), package holidays +5.0% (+5.7%). Airfares might increase their contribution to (services) inflation in July vs June.
  • On the headline front, energy remained in deflationary territory, at -2.1% Y/Y (-1.1% May). Looking at the subcategories that weren't available in the flash reading, household energy prices came in at -3.0% Y/Y (-3.3% May), and petrol at -0.6% (+2.2%).
  • Food prices, which were one of the main inflation upside drivers through 2023 but had cooled towards the end of the year, printed firmer than in May, at +1.1% Y/Y (+0.5%).
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German final June HICP was unrevised from the flash readings at +2.5% Y/Y(+2.8% May) and +0.2% M/M (+0.2% May). The final reading of CPI was also unrevised at +2.2% Y/Y (+2.4% May) and +0.1% M/M (+0.1% May). Core CPI printed at +2.9% Y/Y (+3.0% May), the lowest since February 2022.

  • Overall, the data confirms the main conclusions from the flash reading - services remain sticky and momentum in the next months will be subject to uncertainty.
  • The final major CPI components were unchanged from the flash estimates: goods prices printed at +0.8% Y/Y (+1.0% May), services unchanged at 3.9% (+3.9% May).
  • Developments within the services subcategories were mixed, as projected by MNI after state-level data: While transport and recreation and culture inflation decelerated (+1.6% Y/Y vs +2.6% May and +1.4% vs +1.8%, respectively), healthcare came in at +2.9% (+2.7%), hospitality at +6.5% (+6.3%), and education at +4.9% (+4.9%). Insurance inflation meanwhile declined a bit from its all-time high, to +12.3% Y/Y (vs +13.0%; transport insurance noteworthy at +26.0%).
  • High-volatility items also were a bit mixed: Airfares -6.0% (vs +7.7% May), package holidays +5.0% (+5.7%). Airfares might increase their contribution to (services) inflation in July vs June.
  • On the headline front, energy remained in deflationary territory, at -2.1% Y/Y (-1.1% May). Looking at the subcategories that weren't available in the flash reading, household energy prices came in at -3.0% Y/Y (-3.3% May), and petrol at -0.6% (+2.2%).
  • Food prices, which were one of the main inflation upside drivers through 2023 but had cooled towards the end of the year, printed firmer than in May, at +1.1% Y/Y (+0.5%).