Euro zone producer prices slip more than expected month-on-month in December

February 4, 2019

BRUSSELS (Reuters) – Euro zone producer prices fell more than expected month-on-month in December, pulled down by cheaper energy, data from the European Union’s statistics office Eurostat showed on Monday.

Eurostat said prices at factory gates in he 19 countries sharing the euro fell 0.8 percent in December against November and were 3.0 percent higher than in December 2017.

Economists polled by Reuters had expected a 0.6 percent monthly fall and a 3.2 percent annual rise.

The sharper than expected monthly fall was mainly due to a monthly drop in energy prices, which fell 2.6 percent in December and rose 7.7 percent higher year-on-year.

Without the volatile energy costs, producer prices fell only 0.1 percent on the month and 1.3 percent higher year-on-year.

Producer prices are an early indication of consumer inflation trends because changes in prices at factory gates impact final prices in shops.

The European Central Bank wants to keep consumer prices below, but close to 2 percent over the medium term.

(Reporting By Jan Strupczewski)