Runaway Services Inflation In Euro Area Spikes To Record, Core CPI Stays Near Record

Summary

• The CPI for services spiked by 5.6% in July, compared to a year ago, up from 5.4% in June and 5.0% in May, another record in the data going back to 1997, according to Eurostat today.
• “Core” CPI (without food and energy products that consumers buy) remained at 5.5% in July, same as in June, and up from 5.3% in May.
• Energy Prices have plunged from the peak last year when the CPI for energy had spiked by 45% year-over-year, and then stayed in that range from March through October 2022.

JLGutierrez

“The drivers of inflation are changing… Domestic price pressures, including from rising wages and still robust profit margins,” are increasingly important: ECB’s Lagarde.

Energy prices have plunged from the peak a year ago, and red-hot food inflation backed off