Euro zone producer prices fall more than expected m/m in Oct

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BRUSSELS, Dec 2 (Reuters) – Euro zone producer prices fell more than expected month-on-month in October and decelerated sharply year-on-year, underlining economists’ expectations that inflation may have peaked.

The European Union’s statistics office Eurostat said prices at factory gates in the 19 countries sharing the euro fell 2.9% month-on-month in October for a 30.8% year-on-year rise, decelerating from an 41.9% annual increase in September.

It is the first time since May 2020 that producer prices have declined month on month. Economists polled by Reuters had expected a 2.0% monthly fall and a 31.5% year-on-year rise.

The overall monthly fall was mainly a result of a 6.9% monthly decline in energy price which pulled down the whole index. Year-on-year, energy price growth decelerated to 65.8% from 108.0% in September.

Producer prices are an early indication of trends in consumer prices, which the European Central Bank want to keep at 2.0% in the medium term.

Consumer inflation in November eased far more than expected, raising hopes that sky-high price growth is now past its peak and bolstering, if not outright sealing the case for a slowdown in European Central Bank rate hikes next month.

Industrial producer prices on the domestic market

% change compared with previous month

May 22Jun 22Jul 22Aug 22Sep 22Oct 22
Euro area
Total industry0.61.34.05.01.6-2.9
Total industry excluding energy1.20.50.60.40.40.5
Intermediate goods1.70.40.10.10.10.2
Energy-0.53.29.311.93.1-6.9
Capital goods0.60.40.80.30.40.3
Durable consumer goods0.90.80.90.40.30.5
Non-durable consumer goods1.10.81.20.80.91.1
EU
Total industry0.71.53.94.91.4-2.5
Total industry excluding energy1.40.50.60.40.40.5
Intermediate goods1.70.60.10.10.10.3
Energy-0.13.68.511.92.5-6.6
Capital goods0.70.40.80.30.40.3
Durable consumer goods0.80.80.90.40.40.5
Non-durable consumer goods1.30.71.20.91.01.2

Industrial producer prices on the domestic market

% change compared with same month of the previous year

May 22Jun 22Jul 22Aug 22Sep 22Oct 22
Euro area
Total industry36.236.138.143.441.930.8
Total industry excluding energy16.015.715.114.614.514.0
Intermediate goods25.124.021.520.018.917.4
Energy93.993.498.0117.3108.065.8
Capital goods7.57.67.97.87.67.5
Durable consumer goods9.19.69.89.99.89.8
Non-durable consumer goods12.112.613.814.515.216.0
EU
Total industry36.336.338.143.241.431.2
Total industry excluding energy16.716.215.715.215.014.5
Intermediate goods25.424.321.720.119.017.6
Energy92.592.696.9115.8105.267.0
Capital goods7.97.98.18.17.97.7
Durable consumer goods9.610.110.310.310.110.1
Non-durable consumer goods13.113.514.815.616.417.1

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