German Inflation Accelerates to 16-Month High After Oil Reboundby
Consumer prices rose annual 0.5% this month, matching estimate
Euro-area inflation report due to be published on Friday
German inflation accelerated to the fastest in 16 months in September after the cost of oil rebounded, giving some relief to the European Central Bank as it struggles to meet its goal for price growth in the euro area.
Consumer prices rose 0.5 percent from a year ago, compared with 0.3 percent the previous month, the Federal Statistics Office in Wiesbaden said on Thursday. That was in line with the median forecast in a Bloomberg survey of economists. Prices were unchanged from August.
The ECB is relying on strength in Europe’s largest economy as monetary officials pursue extraordinary stimulus measures to boost demand in the 19-nation euro area. Even so, much of the gain can be attributed to the rebound in crude prices this year, with services costs showing little sign of a pick-up.
Energy prices fell 3.6 percent from a year ago, a significant improvement on the drop of 5.9 percent in August, the report showed. Prices for services rose 1.3 percent, unchanged from the previous month, and the cost of goods slid 0.1 percent.
ECB President Mario Draghi met with German lawmakers in Berlin on Wednesday, where he vowed to continue his ultra-loose monetary stimulus for as long as needed. He pushed back against criticism that his strategy is hurting savers and weakening banks.
Economic data are currently painting a mixed picture for the euro area. Figures on Thursday showed that German unemployment unexpectedly rose in September, the first increase for a year. A euro-area report showed economic confidence in the region unexpectedly improved.
Before the German price report, economists estimated that euro-area inflation probably accelerated to 0.4 percent in September from 0.2 percent the previous month. That still leaves it far below the ECB’s goal of just under 2 percent. Eurostat will release those preliminary figures on Friday.