MNI: Euro Area Producer Inflation Jumps in May

--EMU Producer Prices Up 3.0% y/y in May vs +1.9% y/y April

     LONDON (MNI) - A surge in energy prices carried euro area producer price

inflation rise to a 13-month high in May, according to a report published by

Eurostat on Tuesday.

     --PPI HIGHEST SINCE APR 17 

     Industrial producer prices rose by 3.0% y/y in the euro area, up from a

revised 1.9% y/y in April, to settle at the highest level witnessed since April

2017 when producer price inflation climbed to 4.2%. 

     On the month, prices rose by 0.8%, having held broadly flat since February,

the highest month-over-month outturn registered in two months shy of a

year-and-a-half.

     --ENERGY SURGE

     Largely culpable for the May jump was the marked 2.6% m/m increase in

energy prices. Since 2011, there has not been a month-on-month rise in energy

price inflation greater than 2.6%, with prices growing at this rate only on two

other occasions (Jan 2012 and Aug 2012).

     On the year, energy prices were up 7.6%, up from 3.5% in April, and the

highest outturn since April 2017. 

     Elsewhere, intermediate goods prices rose 0.3% between April and May,

durable goods were up 0.1% while capital goods and for non-durable consumer

goods prices remained stable. Prices in total industry excluding energy rose by

0.2%.

     The 3.0% increase in industrial producer prices in total industry in the

euro area in May 2018, compared with May 2017, in addition to the 7.6% in the

energy sector, was attributed to a 2.4% rise in intermediate goods prices, a

1.1% rise in durable consumer goods prices and rises of 0.9% and 0.3% across

capital goods and non-durable consumer goods respectively. 

     Highlighting the impact of fuels, prices in total industry excluding energy

rose by 1.4%.

     --EU PPI ALSO UP

     Across the wider European Union, producer prices rose 1.0% m/m, up 0.9pp

from April, for a 3.6% rise on the year, up from 1.9% y/y in April.   

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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