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MNI BRIEF: EZ Factory Gate Inflation Sees Modest May Slowdown

(MNI) London
(MNI) London

Eurozone producer price inflation saw the first -- albeit modest -- downtick in two years, although still at elevated levels.

True

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.

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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.

Keep reading...Show less