German Producer Prices Post First Gain in 11 Months
Written on September 19, 2009
German producer prices rose for the first time in 11 months in August as energy costs increased.
Prices gained 0.5 percent from a month earlier after falling 1.5 percent in July, the Federal Statistics Office in Wiesbaden said today. Economists forecast a 0.2 percent increase, according to the median of 24 estimates in a Bloomberg News survey. From a year earlier, producer prices fell 6.9 percent after dropping an annual 7.8 percent in July, the most since records began in 1949.
“Oil was more expensive, on average, than in July,” said Karsten Junius, head of capital markets at Dekabank in Frankfurt. “We can see that the lowest point for annual rates is behind us, but inflation is definitely not going to spiral up.”
While Germany emerged from its worst recession since World War II in the second quarter, rising unemployment may damp the recovery and keep a lid on inflation. Consumer prices posted annual declines in July and August. Bundesbank President Axel Weber said on Sept. 8 that price pressures will remain subdued and inflation fears “are unfounded.”
Energy prices rose 1.1 percent in August from July, according to today’s report. Excluding energy costs, prices increased 0.3 percent in the month and were down 3.4 percent from a year ago.
Crude-oil prices have risen more than 27 percent since the start of this year to around $72 a barrel today. That still is less than half the record $147.27 reached in July 2008.
The European Central Bank has held its benchmark interest rate at a record low of 1 percent since May to encourage growth in the euro-region economy. ECB Executive Board member Juergen Stark said on Sept. 15 that he expects positive inflation rates “within the next few months.”
Filed in: money.