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Stall in Deflationary Trends in Multiple PPI Categories

GERMAN DATA
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German Producer Prices for March came in higher than expectations at -2.9% Y/Y (vs -3.3% cons; -4.1% prior) and +0.2% M/M (vs +0.1% cons; -0.4% prior).

  • Looking at the individual categories, energy saw the most prominent change in its yearly rate against February as base effects continue to taper off (-7.0% Y/Y vs -10.1% prior).
  • Elsewhere, developments were mixed. In multiple categories, a stall of previous deflationary trends could be observed, as investment goods and consumer goods came in at the same yearly rate as in February (+2.8% and +0.4% Y/Y). In non-durable goods, price growth accelerated for the first time since October 2022 at +0.3% Y/Y (vs +0.2% prior); in intermediate goods, deflation decelerated (-3.7% vs -3.8%).
  • A continuation of disinflationary trends could only be observed in the durable goods category (+1.0% vs +1.5% prior);
  • The trend of PPI disinflating at a slower pace in a wide set of producer price categories could also filter through to less CPI disinflation on the margin - which would match recent commentary by ECB's Kazaks on CPI inflation potentially moving largely sideways in 2024.

MNI, Destatis

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German Producer Prices for March came in higher than expectations at -2.9% Y/Y (vs -3.3% cons; -4.1% prior) and +0.2% M/M (vs +0.1% cons; -0.4% prior).

  • Looking at the individual categories, energy saw the most prominent change in its yearly rate against February as base effects continue to taper off (-7.0% Y/Y vs -10.1% prior).
  • Elsewhere, developments were mixed. In multiple categories, a stall of previous deflationary trends could be observed, as investment goods and consumer goods came in at the same yearly rate as in February (+2.8% and +0.4% Y/Y). In non-durable goods, price growth accelerated for the first time since October 2022 at +0.3% Y/Y (vs +0.2% prior); in intermediate goods, deflation decelerated (-3.7% vs -3.8%).
  • A continuation of disinflationary trends could only be observed in the durable goods category (+1.0% vs +1.5% prior);
  • The trend of PPI disinflating at a slower pace in a wide set of producer price categories could also filter through to less CPI disinflation on the margin - which would match recent commentary by ECB's Kazaks on CPI inflation potentially moving largely sideways in 2024.

MNI, Destatis