Services Deceleration Key To Core Slowdown In August

Dutch inflation decelerated sharply in August per today's flash estimate, coming in at 3.0% Y/Y on the CPI measure, vs 4.6% in July. A pullback in services inflation holding down core HICP though was the main takeaway.

• The HICP flash estimate decelerated even more quickly, at 3.4% vs 5.3% in July, and 0.5% M/M vs 1.2% prior. (Note that the main difference between the two is that the Dutch measure doesn't take into account).
• The HICP headline figures were in line with expectations of 3.3% / 0.4%. While there were no expectations for core, it came in at 7.0% Y/Y vs 7.2% in July, and 0.5% M/M vs 1.3% prior, per Eurostat (via BBG).
• Core areas were mixed: non-energy industrial goods inflation ticked higher to 6.4% Y/Y (6.3% in July) but services fell to 5.4% (5.8% in July). The former rose 1.2% M/M (vs -2.8% and -1.7% the prior two months), while the later saw zero M/M growth vs +3.9% in Jul and -0.5% in June.
• Energy costs meanwhile plummeted 28.6% Y/Y (-21.4% in July) with food/beverages/tobacco up 10.3% (vs 11.6% in July).