Global| Sep 14 2007German Core Inflation Breaks Lower - is it for real?
Summary
German inflation trends are mixed but on balance softer, kinder. Inflation trends in Germany are cooling for both the core and headline in terms of their respective sequential rates of growth. The diffusion calculations at the table [...]
German inflation trends are mixed but on balance softer, kinder.
Inflation trends in Germany are cooling for both the core and headline in terms of their respective sequential rates of growth. The diffusion calculations at the table bottom look at accelerating Vs decelerating trends. A diffusion value above 50% shows more acceleration while below 50% shows less. While inflation has accelerated Yr/Yr over six months and three months it is ratcheting lower. The drop in Germany inflation’s pace seems to be authentic. As the Euro area's strongest economy and one where growth is also export-led, we should wonder how much of this is being induced by the strength of the euro. We have seen already reports of irregular output and sharply reduced orders growth in Germany. Is that the price Germany is paying for having such good inflation results?
| Mo/Mo % | Saar % | Yr/Yr | |||||
| Aug-07 | Jul-07 | Jun-07 | 3-Mo | 6-Mo | 12-Mo | Yr Ago | |
| HICP Total | -0.1% | 0.2% | 0.2% | 1.2% | 1.8% | 2.0% | 1.7% |
| Core | 0.1% | 0.2% | 0.1% | 1.6% | 1.8% | 2.2% | 0.8% |
| CPI | |||||||
| All | 0.1% | 0.3% | 0.1% | 1.8% | 2.7% | 2.0% | 1.7% |
| CPI excl Food & Energy | 0.2% | 0.1% | 0.1% | 1.5% | 2.0% | 2.0% | 0.8% |
| Food | 1.1% | 0.6% | 0.1% | 7.2% | 4.3% | 2.4% | 2.6% |
| Alcohol | 0.0% | 0.0% | 0.3% | 1.1% | 1.7% | 2.1% | 2.0% |
| Clothing & Shoes | -0.4% | -0.6% | -0.2% | -4.8% | -3.2% | 0.9% | -0.8% |
| Rent & Utilities | 0.1% | 0.2% | 0.2% | 1.8% | 1.4% | 1.4% | 2.7% |
| Health Care | 0.4% | 0.4% | 0.5% | 5.2% | 3.0% | 1.4% | 1.0% |
| Transport | -0.9% | -0.1% | 0.0% | -3.9% | 2.7% | 1.9% | 2.8% |
| Communication | 0.1% | -0.3% | -0.2% | -1.7% | -0.4% | 0.7% | -3.7% |
| Recreation & Culture | -1.1% | 1.3% | -0.1% | 0.4% | -0.6% | 0.8% | -0.4% |
| Education | 0.8% | -0.1% | 0.3% | 4.1% | 61.2% | 28.7% | 2.5% |
| Restaurant & Hotel | 0.0% | 0.0% | 0.0% | 0.0% | 1.6% | 2.6% | 1.0% |
| Other | 0.2% | 0.1% | 0.2% | 1.8% | 1.4% | 2.3% | 0.9% |
| Diffusion | -- | -- | -- | 45.5% | 36.4% | 72.7% | -- |
| Type: | Diffusion: Current Compared to | 6-mo | 12-mo | Yr-Ago | -- | ||
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
More Economy in Brief
