Jan Result: +0.1% m/m, +4.8% y/y (ex-construction)
MNS Survey Median: +0.1% m/m, +4.9% y/y
MNS Survey Range: -0.3% to +0.6% m/m, +4.5% to +5.4% y/y
Previous Result -0.4% m/m, +5.4% y/y (unrevised)
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FRANKFURT (MktNews) - Industrial producer prices rose in line with expectations in January, though details of the report are likely to reinforce the European Central Bank concern on inflation.
Durable and non-durable consumer goods prices, as well as capital goods prices, rose more in January than in previous months. These increases were only partly offset by a sharp decline in intermediate goods prices due to lower energy costs.
Both durable and non-durable consumer goods prices rose a strong 0.5% m/m in January, much more than in previous months. Moreover, the annual inflation rate for non-durable consumer goods rose to 3.1% in January from 2.7% in December and only 1.7% in August last year. The rise in the durable consumer goods annual rate was less pronounced -- to 1.7% in January after 1.6% in December and 1.3% in August last year -- but has the same upward trend.
And even capital goods prices, which were remarkably stable last year, rose 0.2% in January, the highest monthly increase for some time. The annual rate remained low at +0.9% (the same as December but above the 0.7% gain in August last year) but also appears to be creeping up.
The ECB is now clearly confronted with a strong upward trend in consumer goods prices. If this trend continues in February, and given that energy prices rose during the month, eurozone PPI could jump. This, in turn, would reinforce the ECB's caution on inflation risks even as signs accumulate of a eurozone economic slowdown.