Eurozone producer prices accelerated sharply in July, with PPI swinging from -0.3% to +1.6% m/m, above 1.2% consensus. Annual producer inflation also rose from 4.6% to 5.8% y/y. Energy accounted for most of monthly jump, with prices rebounding from -1.5% to +5.6% m/m, while total industry excluding energy slowed from +0.2% to 0.0% m/m.
Annual figures nevertheless showed that pipeline price pressure extended beyond energy. Energy inflation accelerated from 8.8% to 12.9% y/y, while intermediate-goods inflation rose from 6.1% to 6.3%. PPI excluding energy edged higher from 3.0% to 3.1% y/y, and capital-goods inflation increased from 2.3% to 2.6%. Durable consumer-goods inflation held at 2.9%, while non-durable consumer goods fell further from -0.6% to -0.7%.
Price increases were also broad geographically. Producer prices rose 3.0% m/m in both Spain and Italy, 1.1% in Germany and France, while Ireland led Eurozone with 4.3% increase. July’s headline surge was therefore overwhelmingly energy-driven on monthly basis, but continued rise in ex-energy and intermediate-goods inflation suggests underlying producer-cost pressures have not disappeared.
Data Summary
| Indicator | July | June | Trend |
|---|---|---|---|
| PPI m/m | +1.6% | -0.3% | Sharp rebound |
| PPI y/y | +5.8% | +4.6% | Inflation accelerated |
| PPI excluding energy m/m | 0.0% | +0.2% | Prices unchanged |
| PPI excluding energy y/y | +3.1% | +3.0% | Inflation edged higher |
July headline PPI was also above +1.2% m/m consensus.
Producer Price Components
| Component | July m/m | July y/y | Trend |
|---|---|---|---|
| Energy | +5.6% | +12.9% | Main driver of headline surge |
| Intermediate goods | 0.0% | +6.3% | Annual inflation remained strong |
| Capital goods | +0.3% | +2.6% | Prices increased |
| Durable consumer goods | 0.0% | +2.9% | Monthly prices stable |
| Non-durable consumer goods | -0.1% | -0.7% | Continued price declines |
Key Takeaways
- Eurozone PPI swung from -0.3% to +1.6% m/m in July, substantially above +0.2% consensus.
- Annual producer inflation accelerated from 4.6% to 5.8% y/y.
- Energy was overwhelming driver of monthly increase, jumping 5.6% m/m and 12.9% y/y. Excluding energy, producer prices were unchanged on month.
- Underlying annual pipeline pressure nevertheless remained firm: PPI excluding energy edged from 3.0% to 3.1% y/y, while intermediate-goods inflation rose from 6.1% to 6.3%.
- Producer-price increases were broad geographically, with Spain and Italy both up 3.0% m/m, while Germany and France rose 1.1%.
- July therefore shows an energy-led headline surge rather than broad monthly inflation acceleration, but elevated intermediate-goods and ex-energy annual inflation suggest upstream cost pressure has not disappeared.
