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Eurozone Inflation Experiences A Further Fall

James Boston
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Eurozone Inflation Experiences A Further Fall

It was not altogether unexpected that we would experience a fall in the overall Eurozone’s inflation rate today, particularly considering the drop in the equivalent German figures yesterday. The November figures for the Zone, just published in Preliminary format by Eurostat, clearly point to a slowing in much need price growth activity. The headline Consumer Price Index (CPI) now reads at 0.3%, down a tick from the final October number of 0.4%, there was little surprise here as the market consensus fully anticipated the fall. On a more positive note however the Core CPI, this is the reading that strips out fuel and energy costs, has managed to remain stable at 0.7% this month. A comparison of the Core and Non Core numbers points to energy costs as being a major contributing factor to the overall drop, this is hardly surprising given the recent steep decline in the cost of oil and is perhaps even more understandable in the context of the mildness of the European winter so far this year.

Eurostat also took the opportunity this morning to publish the final October Unemployment numbers for the Eurozone. There is little to see here as the official rate remains at the 11.5% level as anticipated. The Eurozone Unemployment numbers have been stable at this figure for a run of five months now, this is in a sense welcome given the deterioration in overall Eurozone growth that has been experienced over the same period. It is however at odds with many of the nationally reported statistics, for example Germany yesterday posted an improvement in it’s employment situation and this comes on the back of increased performance in the labour statistics in the periphery countries such as Spain, Ireland and Portugal. This development can however be taken as a sign that underlying austerity in these countries is finally beginning to show a payoff.

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