PPI - Energy Deflation Waning But Broad-Based Disinflation Elsewhere

German Producer Prices for February came in below expectations at -4.1% Y/Y (vs -3.8% cons; -4.4% prior) and -0.4% M/M (vs -0.1% cons; +0.2% prior).

• Looking at the individual categories, there was broad-based disinflation, particular in consumption goods (+0.4% Y/Y vs +1.1% prior) and non-durable goods (+0.2% Y/Y vs 1.1% prior).
• Durable goods inflated +1.5% Y/Y (vs +1.6% prior), investment goods inflated +2.8% Y/Y (vs 3.0% prior), and intermediate goods deflated 3.8% Y/Y (vs 3.7% prior). In all of these categories, the yearly rates were the lowest in the current inflation cycle.
• Only the yearly rate in the energy category inclined, coming in at its highest level since May 2023 at -10.1% Y/Y (vs -11.7% prior), driven by waning base effects. Excluding energy, producer prices inflated +0.1% M/M in February but decreased 0.8% Y/Y, Destatis notes.
• The fact that most categories continue to print lower yearly growth rates can be seen as good sign in terms of mid-term disinflation in consumer prices.

MNI, Destatis