Final HICP

August: +0.4% m/m, +2.2% y/y (revised from +0.3% m/m)
July: +0.4% m/m, +1.9% y/y

Final CPI

August: +0.4% m/m, +2.1% y/y (revised from +0.3%/+2.0%)
July: +0.4% m/m, +1.7% y/y
—

FRANKFURT (MNI) – The monthly rise in German consumer prices in
August was revised up to 0.4% from 0.3%, which boosted the annual CPI
rate to a four-month high of 2.1% from 2.0% in the flash estimate but
did not change the annual HICP estimate of 2.2%, the Federal Statistical
Office reported on Wednesday.

Amid surging Brent crude and WTI prices, motor fuel costs jumped
4.3% on the month for a 9.4% rise on the year. Household energy prices
were up 1.0% on the month, fueled by the 4.3% rise in heating oil costs,
to end 6.4% higher on the year.

Core CPI, which factors out the above components, was unchanged on
the month to give an annual rise of 1.4%.

Food and non-alcoholic beverage prices fell 0.3% on the month on
the back of cheaper fruits and vegetables, resulting in an annual rise
of 3.1%.

The jump in fuel prices boosted overall transport prices 1.3% on
the month and 3.9% on the year.

Conversely, cheaper package tour vacations pushed leisure prices
down 0.1% on the month, reducing the annual rise to 1.8%.

Pipeline pressures in the private sector remain subdued, a recent
PMI report showed, with input price inflation moderate and output prices
falling further. Further down the production chain, an Ifo survey showed
retailers revising down their selling price expectations to a 23-month
low, suggesting that consumers could be spared the full brunt of higher
prices.

However, this trend could soon reverse itself. Wholesale price
inflation hit a nine-month high in August, while the same Ifo study
showed a growing majority of manufacturing and wholesaling firms looking
to hike selling prices in the short term.

With labour costs already up 1.5% in 2Q and further rises expected,
firms may try to raise prices to preserve profit margins.

While stronger wage growth could lead to inflations risks down the
road, Pier Carlo Padoan, chief economist with the Organisation for
Economic Cooperation and Development, argued that Germany should
consider raising its inflation tolerance to help debtor Eurozone members
better adjust.

By accepting higher wage inflation, creditor countries such as
Germany would provide a boost to debtor countries via increased
consumption, while lower wages would allow the Eurozone’s debtor nations
to be more competitive, Padoan said.

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

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