German final September HICP was unrevised from the flash readings at 1.8% Y/Y (2.0% Aug) and -0.1% M/M (-0.2% Aug). The final reading to CPI was also unrevised at +1.6% Y/Y (+1.9% Aug) and 0.0% M/M (-0.1% Aug). Core CPI printed at +2.7% Y/Y (+2.8% Aug), the lowest rate since January 2022.
- Overall, the data confirms the main conclusions form the flash reading - services eased a little (contribution -0.04pp vs Aug) but momentum remained elevated, and goods inflation decreased again on a Y/Y basis (momentum ticked up, however). Energy prices were largely behind the drop in headline (contribution -0.24pp vs Aug). The 0.1pp drop on core Y/Y (when rounded to 1dp) was indeed negligible - core contribution to headline remained unchanged vs Aug.
- Developments within the services subcategories were mixed, as projected by MNI after state-level data - in most categories, some moderation was seen, however. The mixed-weighted transport category again saw a drop on the back of lower fuel prices. See table for details.
- Looking ahead, in line with the broader Eurozone, German inflation is expected to tick up again towards the end of the year on energy base effects. On services, momentum was a bit softer most recently but remained elevated. Some stickiness clearly remains.
MNI's inflation breadth tracker (see chart below) shows disinflation partially reversing in the low-inflation categories in September, with the percentage of ECOICOP (European classification of individual consumption according to purpose, a standardized category split) items printing at or below 2% falling to 52.4%% from 53.1% in Aug. In the high-inflation categories, disinflation progressed a little again after having stalled last month, with the percentage of categories printing above 6% falling to 10.3% from 12.5% in August.
