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March Final HICP Data Suggests “Easter Effects” Limited To Airfares

EUROZONE DATA
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A closer look at the final Eurozone March HICP data suggests upward “Easter-effects” in key services categories were largely limited to airfares, denting expectations for a strong reversal in April.

  • Many analysts expected sub-components sensitive to the early 2024 Easter weekend (e.g. airfares, package holidays, catering services and accommodation services) to push inflation higher in March, before having an opposite (i.e. downward) effect in April.
  • Eurostat data shows that airfares rose 8.2% M/M NSA in March ’24, above the 4.0% M/M print in March 2023 and the 1996-2023 average of 2.4% M/M. This was the second highest March print since 1996, with March 2013’s 8.6% M/M also occurring in tandem with an early Easter weekend.
  • Other relevant components saw less obvious “Easter effects”. Package holidays were 5.8% M/M (vs 5.9% in March 2023) while accommodation services were 2.7% M/M (vs 2.0% in March 2023).
  • This suggests that while airfares may see a sizeable monthly NSA reversal in April 2024, smaller changes are likely in other components.
  • Overall, the data indicate that March’s stickiness in services inflation (at 4.0% Y/Y for the fifth consecutive month) cannot fully be attributed to Easter-related calendar effects.
  • Furthermore, airfares only contributed 0.04pp to the 2.4% Y/Y headline HICP rate, so even that component may exert only a small drag on services inflation in April, leaving the need for more broad-based disinflation to help the category finally break through the 4.0% handle for the first time in 6 months.

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A closer look at the final Eurozone March HICP data suggests upward “Easter-effects” in key services categories were largely limited to airfares, denting expectations for a strong reversal in April.

  • Many analysts expected sub-components sensitive to the early 2024 Easter weekend (e.g. airfares, package holidays, catering services and accommodation services) to push inflation higher in March, before having an opposite (i.e. downward) effect in April.
  • Eurostat data shows that airfares rose 8.2% M/M NSA in March ’24, above the 4.0% M/M print in March 2023 and the 1996-2023 average of 2.4% M/M. This was the second highest March print since 1996, with March 2013’s 8.6% M/M also occurring in tandem with an early Easter weekend.
  • Other relevant components saw less obvious “Easter effects”. Package holidays were 5.8% M/M (vs 5.9% in March 2023) while accommodation services were 2.7% M/M (vs 2.0% in March 2023).
  • This suggests that while airfares may see a sizeable monthly NSA reversal in April 2024, smaller changes are likely in other components.
  • Overall, the data indicate that March’s stickiness in services inflation (at 4.0% Y/Y for the fifth consecutive month) cannot fully be attributed to Easter-related calendar effects.
  • Furthermore, airfares only contributed 0.04pp to the 2.4% Y/Y headline HICP rate, so even that component may exert only a small drag on services inflation in April, leaving the need for more broad-based disinflation to help the category finally break through the 4.0% handle for the first time in 6 months.