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German Inflation Drops Further

James Boston
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German Inflation Drops Further

The lack of price inflation in the Eurozone is showing all the signs of becoming a long term problem. Updated consumer price readings out of the Eurozone’s largest economy are today providing evidence of further falls in the already perilously low inflation rate. Germany has just published it’s Preliminary Consumer Price Index (CPI) for the month of November and this is not offering any encouragement for a sustainable pick up in price growth activity. Year on year the CPI now stands at just 0.6%, although this number was largely expected today it does represent a measurable fall from the final October figure of 0.8%. On a month on month basis there is some evidence of growth, but only back to the 0% level, there was an anticipation of some marginal growth of 0.1% following the October price contraction of -0.3%.

The Harmonized Index of Consumer Prices (HICP) has not fared any better today. The European Central Bank’s preferred method of measuring price growth has dropped slightly more than the CPI in Germany today. Year on year the Preliminary HICP reading for November is now showing inflation running at just 0.5%, this is down from October’s 0.7% and misses market expectations for a 0.6% reading. Similar to the CPI, the HICP month on month reading has come at a flat 0%, recovering somewhat from October’s -0.3% fall but missing the consensus estimated for a 0.1% reading.

It is not however all bad news out of Germany today as the employment numbers that were released earlier this morning showed some encouraging signs. The Unemployment Change measurement indicates that there were 14k less individuals claiming to be unemployed during the November reporting period, this was anticipated to be a more modest 4k improvement. The headline Unemployment Rate has fallen to 6.6% for the month of November while the October rate was revised downward to match it, this beats the consensus estimate the rate to remain at 6.7%.

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