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 22 | Jun 22 | Jul 22 | Aug 22 | Sep 22 | Oct 22 | |
| Euro area | ||||||
| Total industry | 0.6 | 1.3 | 4.0 | 5.0 | 1.6 | -2.9 |
| Total industry excluding energy | 1.2 | 0.5 | 0.6 | 0.4 | 0.4 | 0.5 |
| Intermediate goods | 1.7 | 0.4 | 0.1 | 0.1 | 0.1 | 0.2 |
| Energy | -0.5 | 3.2 | 9.3 | 11.9 | 3.1 | -6.9 |
| Capital goods | 0.6 | 0.4 | 0.8 | 0.3 | 0.4 | 0.3 |
| Durable consumer goods | 0.9 | 0.8 | 0.9 | 0.4 | 0.3 | 0.5 |
| Non-durable consumer goods | 1.1 | 0.8 | 1.2 | 0.8 | 0.9 | 1.1 |
| EU | ||||||
| Total industry | 0.7 | 1.5 | 3.9 | 4.9 | 1.4 | -2.5 |
| Total industry excluding energy | 1.4 | 0.5 | 0.6 | 0.4 | 0.4 | 0.5 |
| Intermediate goods | 1.7 | 0.6 | 0.1 | 0.1 | 0.1 | 0.3 |
| Energy | -0.1 | 3.6 | 8.5 | 11.9 | 2.5 | -6.6 |
| Capital goods | 0.7 | 0.4 | 0.8 | 0.3 | 0.4 | 0.3 |
| Durable consumer goods | 0.8 | 0.8 | 0.9 | 0.4 | 0.4 | 0.5 |
| Non-durable consumer goods | 1.3 | 0.7 | 1.2 | 0.9 | 1.0 | 1.2 |
Industrial producer prices on the domestic market
% change compared with same month of the previous year
| May 22 | Jun 22 | Jul 22 | Aug 22 | Sep 22 | Oct 22 | |
| Euro area | ||||||
| Total industry | 36.2 | 36.1 | 38.1 | 43.4 | 41.9 | 30.8 |
| Total industry excluding energy | 16.0 | 15.7 | 15.1 | 14.6 | 14.5 | 14.0 |
| Intermediate goods | 25.1 | 24.0 | 21.5 | 20.0 | 18.9 | 17.4 |
| Energy | 93.9 | 93.4 | 98.0 | 117.3 | 108.0 | 65.8 |
| Capital goods | 7.5 | 7.6 | 7.9 | 7.8 | 7.6 | 7.5 |
| Durable consumer goods | 9.1 | 9.6 | 9.8 | 9.9 | 9.8 | 9.8 |
| Non-durable consumer goods | 12.1 | 12.6 | 13.8 | 14.5 | 15.2 | 16.0 |
| EU | ||||||
| Total industry | 36.3 | 36.3 | 38.1 | 43.2 | 41.4 | 31.2 |
| Total industry excluding energy | 16.7 | 16.2 | 15.7 | 15.2 | 15.0 | 14.5 |
| Intermediate goods | 25.4 | 24.3 | 21.7 | 20.1 | 19.0 | 17.6 |
| Energy | 92.5 | 92.6 | 96.9 | 115.8 | 105.2 | 67.0 |
| Capital goods | 7.9 | 7.9 | 8.1 | 8.1 | 7.9 | 7.7 |
| Durable consumer goods | 9.6 | 10.1 | 10.3 | 10.3 | 10.1 | 10.1 |
| Non-durable consumer goods | 13.1 | 13.5 | 14.8 | 15.6 | 16.4 | 17.1 |
