Energy costs pushing Eurozone producers back into deflation

THE EURO area’s producer price index fell by 0.1 per cent in May 2013, compared to May 2012, the second month of year-on-year price falls since 2010.

Price rises have slowed down over the past two years, and were 0.1 per cent lower in May than they were twelve months earlier. Prices for producers fell by 0.3 per cent between April and May alone. There was no decline over the month in the EU as a whole.

Falling prices were driven by the declining cost of energy, which dropped by 1.8 per cent in the euro area. Prices excluding energy actually rose by 0.5 per cent over the same year-long period.

Non-durable goods, a category which includes food, ticked upward by two per cent.

Eurostat, the EU’s statistical agency, also revised the Eurozone unemployment rate upwards to 12.2 per cent. A statistical error was cited as the reason for the change from yesterday’s 12.1 per cent.