October: +0.1% m/m, +2.6% y/y

MNI survey median: -0.1% m/m, +2.5% y/y
MNI survey range: -0.2% to flat m/m

September: +0.2% m/m, +2.7% y/y
August: +0.9% m/m, +2.7% y/y
July: +0.3% m/m, +1.6% y/y
June: -0.5% m/m, +1.8% y/y

FRANKFURT (MNI) – Eurozone producer prices unexpectedly rose
slightly in October, as costlier consumer goods offset cheaper energy,
Eurostat reported Tuesday.

The 0.1% monthly rise was the smallest in four months and much less
than the 0.9% jump in September. The annual increase narrowed slightly
to 2.6%. Still, most analysts had expected a modest overall decline in
producer prices in October.

Energy producer prices fell back 0.2% after stagnating in
September, reducing the annual increase to 5.9%, the smallest since July
(+4.4%). Core PPI, which excludes energy, was up 0.1% on the month,
while the annual increase hit a seven-month high of +1.5%.

Intermediate goods prices were unchanged on the month and 1.3%
higher on the year. Capital goods output prices were also stable on the
month, leaving annual increase steady at 0.9%.

Consumer durable goods prices were up 0.1% on the month, while
non-durables rose 0.2%. On the year, durable goods were up 1.3%, while
non-durables increased 2.5%.

The November PMI suggested that pipeline price pressures have
remain subdued, with input price inflation (53.3) at its weakest in
three months and output prices (49.5) dampened by low demand and high

A recent European Commission poll showed that manufacturers’
selling price expectations remain quite low amid pessimism about order
books and near-term production levels.

Slowing producer prices support expectations that consumer price
inflation will continue to trend lower over the coming months. HICP
slowed in November to an annual rate of 2.2%, the lowest in almost two
years, reflecting weaker contributions from energy and food, alcohol and

Professional forecasters polled by the European Central Bank last
month revised up their HICP outlook for this year and the next to +2.5%
and +1.9%, respectively, and left the 2014 call unchanged at +1.9%.

The revisions “mainly reflect higher than expected increases in
commodity prices and indirect taxes,” the ECB explained, noting that
risks to the baseline inflation outlook were seen as “broadly balanced.”

— Frankfurt bureau: +49-69-720 142; email: twailoo@mni-news.com —