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MNI BRIEF: EZ Factory Gate Inflation Sees Modest May Slowdown

(MNI) LONDON
(MNI) London

Eurozone factory-gate inflation slowed modestly in May, decelerating to +36.3% Y/Y from37.2% in April. Consensus across economists was looking for a softer 0.5pp slowdown. This is the first deceleration in annualised PPI since May 2020.

On the month, PPI rose 0.7%, having risen 1.2% m/m in April. It was the smallest monthly uptick since February 2021. Despite continued inflation in intermediate goods (+1.7%), non-durable consumer goods (+1.3%) and durables (+0.9%), capital goods rose by only +0.6% and energy sector goods saw prices contact by 0.2% month-over-month, providing the key downwards pressure on the headline print.

This will be welcome news for the ECB as the price pressure of global energy prices looks to be easing for the second consecutive month, feeding into their narrative that headline inflation will begin slowing by year end.

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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