Euro-Area Producer Prices Unexpectedly Drop From Year Ago

Photographer: Alessia Pierdomenico/Bloomberg

Factory-gate prices in the 17-nation economy fell 0.2 percent after a 0.6 percent annual increase in March, the European Union’s statistics office in Luxembourg said today. Close

Factory-gate prices in the 17-nation economy fell 0.2 percent after a 0.6 percent... Read More

Close
Open
Photographer: Alessia Pierdomenico/Bloomberg

Factory-gate prices in the 17-nation economy fell 0.2 percent after a 0.6 percent annual increase in March, the European Union’s statistics office in Luxembourg said today.

Euro-area producer prices unexpectedly declined from a year earlier in April for the first time since 2010, indicating inflation will slow more and adding to arguments for further action by the European Central Bank.

Factory-gate prices in the 17-nation economy fell 0.2 percent after a 0.6 percent annual increase in March, the European Union’s statistics office in Luxembourg said today. That’s the first annual decline since February 2010, when prices fell 0.6 percent. Economists had projected a 0.2 percent gain in April, according to median of 16 estimates, in a Bloomberg News survey. (EUPPEMUY)

Euro-area annual consumer-price growth has been below the ECB’s 2 percent ceiling since February, though the rate accelerated to 1.4 percent in May. The ECB will keep its benchmark rate at a record low of 0.5 percent when it meets on June 6, according to the median of 59 economists in a separate Bloomberg survey.

“Our baseline scenario continues to be one of a very gradual recovery starting in the latter part of this year,” ECB President Mario Draghi said yesterday in Shanghai. ‘There are a few signs of a possible stabilization,” though the economic outlook is “challenging,” he said.

The euro was little changed against the U.S. dollar after the data, trading at $1.3073 at 11:04 a.m. in Brussels, up less than 0.1 percent on the day.

Energy Costs

Energy costs at the producer level fell an annual 2 percent in April after a 0.3 percent decline in the prior month, today’s report showed. Prices of intermediate capital goods decreased 0.3 percent in April, while durable goods showed a 0.7 percent gain.

In Germany, Europe’s largest economy, producer-price inflation slowed to 0.1 percent in April from 0.4 percent, according to the report. French factory prices rose 0.6 percent, while those in Spain declined 0.5 percent.

From a the prior month, April producer prices declined 0.6 percent. The March year-on-year increase was previously estimated at 0.7 percent.

To contact the reporter on this story: Patrick Henry in Brussels at phenry8@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.