BRUSSELS – Euro zone producer prices fell by more than expected in January, although entirely due to falling energy prices as the charges for all other goods rose.
EU statistics office Eurostat said on Friday according to Reuters that prices at factory gates in the 20 countries sharing the euro declined by 2.8% month-on-month in January for a 15.0% year-on-year increase, slowing down from 24.5% yearly increase in December.
Economists polled by Refinitiv had expected a monthly fall in prices of 0.3% and a year-on-year deceleration to 17.7%.
The energy component dropped by 9.4%, although was still up 20.5% from a year earlier, just before Russia’s invasion of Ukraine.
Without the volatile energy component, producer prices were 1.1% higher month-on-month, the steepest increase since May 2022, although the year-on-year increase eased to 11.1% from 12.4% in December
Producer prices are an early signal of inflationary trends because their changes are usually transferred onto final consumers. Consumer inflation slowed to 8.5% in February, but underlying inflation surged. The European Central Bank wants to keep inflation at 2.0% and has been raising interest rates repeatedly to curb price growth.
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