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Services Inflation Estimated at 0.5-0.6% M/M; 3.9% Y/Y

GERMAN DATA
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Looking a bit closer at this morning’s German state level flash May inflation data, we estimate a 0.5-0.6% M/M reading for the services component overall, based on 50% of the national index.

  • MNI’s estimates suggest recreation and culture inflation rose 0.7-0.8% M/M (vs 0.1% prior, median since 2010: 0.65%), while restaurants and hotels rose 0.6% M/M (vs 0.6% prior, median since 2010: 0.4%). Package holidays also registered a strong 5.7% M/M (vs -0.3% prior, median since 2010: 2.15%).
  • On an annual basis, the aforementioned transport component is estimated at 2.6% Y/Y (vs 0.9% prior), with services overall estimated at 3.9% Y/Y (vs 3.4% prior).
  • The transport component makes up ~14% of the overall CPI index. MNI’s preliminary calculations indicate that transport contributed around 0.3pp to the headline figure, 0.4pp to core and 0.6pp to services in May.
  • Goods prices are expected to continue moderating, with MNI estimating an annual inflation rate of 1.0% Y/Y (vs 1.2% prior).
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Looking a bit closer at this morning’s German state level flash May inflation data, we estimate a 0.5-0.6% M/M reading for the services component overall, based on 50% of the national index.

  • MNI’s estimates suggest recreation and culture inflation rose 0.7-0.8% M/M (vs 0.1% prior, median since 2010: 0.65%), while restaurants and hotels rose 0.6% M/M (vs 0.6% prior, median since 2010: 0.4%). Package holidays also registered a strong 5.7% M/M (vs -0.3% prior, median since 2010: 2.15%).
  • On an annual basis, the aforementioned transport component is estimated at 2.6% Y/Y (vs 0.9% prior), with services overall estimated at 3.9% Y/Y (vs 3.4% prior).
  • The transport component makes up ~14% of the overall CPI index. MNI’s preliminary calculations indicate that transport contributed around 0.3pp to the headline figure, 0.4pp to core and 0.6pp to services in May.
  • Goods prices are expected to continue moderating, with MNI estimating an annual inflation rate of 1.0% Y/Y (vs 1.2% prior).