Euro-Zone Inflation Fell in January
29.02.2012 12:52
WSJ: The annual rate of inflation in the euro zone was lower than first estimated in January, although still well above the European Central Bank's target.
The European Union's official statistics agency Eurostat Wednesday said consumer prices in the 17 countries that use the euro rose by 2.6% in the 12 months to the end of January. Earlier this month, it estimated that the annual rate of inflation was 2.7%.
Prices fell by 0.8% from December, the largest month-on-month decline since January 2010. Relatively large declines in prices are common in the first month of the year due to postholiday discounting by retailers, particularly of clothing. In January, clothing prices fell by 14.1%.
While the fall in the annual rate of inflation from 2.7% in December will be welcomed by the ECB, policy makers will likely be concerned that the inflation rate remains above their target of slightly less than 2.0%.
There has also been a worrying recent rise in oil prices denominated in euros, as well as higher-than-expected inflation readings from Germany for February.
With recent surveys and indicators suggesting the euro-zone economy has stabilized in the early part of the year, albeit still at risk of a mild recession, the ECB is likely to leave its key interest rate unchanged at 1.0% when its governing council meets next week.
Eurostat said that excluding volatile items such as energy and food, prices fell by 1.7% from December, leading to an annual rate of core inflation of 1.5%, down from 1.6% in December.
Germany's seasonally adjusted jobless figures were slightly weaker than expected in February, according to data from the country's labor agency Wednesday, showing that even the country's vaunted "job miracle" has to take some pause for air.
Seasonally adjusted jobless numbers were unchanged in February, the data showed, following a revised drop of 26,000 in January, after a fall of 34,000 was originally reported.
Economists polled by Dow Jones Newswires had forecast a fall of 5,000 in February.
As a percentage, the seasonally adjusted unemployment rate remained steady at 6.8%, matching that of January, which was revised up 0.1 percentage point. Economists had expected the adjusted unemployment rate to remain at 6.7%.
The 6.8% level remains the lowest seasonally adjusted unemployment rate since comparable records began in 1998.
French consumer spending fell unexpectedly in January, official statistics showed Wednesday.
Consumer spending in the euro zone's second-largest economy fell 0.4% in January from December and was 2.2% lower compared with the year-earlier period, figures from Insee showed.
A sharp fall in spending on manufactured goods, down 0.8% on the month, drove the overall figures lower, Insee said.
Economists polled by Dow Jones Newswires had expected no change in the data on a monthly basis.
Still, French consumption in December was stronger than previously reported, Insee said, revising its reading to a 0.2% fall on the month earlier from a 0.7% fall.
Christine Popp in Nuremberg contributed to this article.