First Month of Decline in Producer Prices Since December 2020
- Producer prices in the Euro Area declined by 1.5% YoY in May 2023.
- This marked the first month of decline in producer prices since December 2020.
- Energy costs experienced a significant 13.3% slump, contributing to the overall decline.
- Prices for intermediate goods dropped by 1.5% and inflation slowed for capital goods, durable goods, and non-durable consumer goods.
- Excluding energy, producer price inflation decelerated to 3.4% YoY in May.
- On a monthly basis, producer prices fell by 1.9%, marking the fifth consecutive month of decrease.
- Energy costs saw a substantial decrease of 5.0% in May, driving the overall drop in prices.
- Prices for intermediate goods declined by 1.0% and non-durable consumer goods dropped by 0.1%.
- The cost of capital goods remained unchanged, while durable consumer goods rose by 0.3%.
- Excluding the impact of energy, producer prices showed a decrease of 0.4% in May.
The decline in producer prices in the euro area may provide a boost to production and help alleviate inflationary pressures, particularly in light of the current hawkish stance of central banks. This data could have a bearish impact on the euro, while the equities market could potentially find support from the positive price developments.
