Eurozone Producer Prices Drop More Than Expected, Signaling Weakening Price Pressure
In the Eurozone, producer prices have dropped slightly more than expected, signaling further weakening price pressure in the industry. According to the statistics office Eurostat, producer prices fell by 0.2 percent in May compared to the previous month. Economists surveyed by Reuters had anticipated a decrease of only 0.1 percent after a decline of 1.0 percent in April. Year-on-year, producer prices fell by 4.2 percent in May, a figure largely anticipated by economists. At the beginning of 2023, producer prices had seen double-digit percentage increases year-on-year, largely driven by rising energy costs. However, in May, energy producer prices were 11.4 percent lower than in the same month the previous year, contributing to the tempering of overall price increases. Producer prices are listed from the factory gate in the statistics, before they are further processed or traded. They are considered an early indicator of the development of consumer prices. In the 20-country Eurozone community, consumer prices increased by only 2.5 percent year-on-year in June. In May, inflation had risen to 2.6 percent following 2.4 percent in April.
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