| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Month over Month | 0.2% | 0.2% to 0.2% | 0.2% | 0.2% |
| Year over Year | 0.8% | 0.8% to 0.8% | 0.8% | 0.8% |
| HICP - M/M | 0.2% | 0.2% to 0.2% | 0.2% | 0.2% |
| HICP - Y/Y | 0.9% | 0.9% to 0.9% | 0.9% | 0.9% |
Highlights
March consumer inflation in remained subdued, with final figures confirming the preliminary 0.8 percent rise, and matching the February results. A 6.6 percent year-over-year decline in energy prices took some of the sting out of a 2.3 percent increase in services and a 3.8 percent rise in fresh food.
Prices rose by 0.2 percent in March after remaining flat in February, attributable to a 5.7 percent seasonal increase in clothing and footwear. Rents and utilities increased by a modest 0.1 percent in March but were 2.6 percent above year ago levels, which could strain consumer discretionary spending.
The harmonized index of consumer prices (HICP), used for comparison among European economies, mirrored these patterns, rising 0.9 percent year-over-year and 0.2 percent over the month.
The results point to a low-inflation environment where household purchasing power remains stable for now, but prices pressures could start to emerge in the April data due to tariffs. This latest update leaves the RPI at minus 14 and the RPI-P at minus 13, showing that economic activity is slightly lagging market expectations of the French economy.
Prices rose by 0.2 percent in March after remaining flat in February, attributable to a 5.7 percent seasonal increase in clothing and footwear. Rents and utilities increased by a modest 0.1 percent in March but were 2.6 percent above year ago levels, which could strain consumer discretionary spending.
The harmonized index of consumer prices (HICP), used for comparison among European economies, mirrored these patterns, rising 0.9 percent year-over-year and 0.2 percent over the month.
The results point to a low-inflation environment where household purchasing power remains stable for now, but prices pressures could start to emerge in the April data due to tariffs. This latest update leaves the RPI at minus 14 and the RPI-P at minus 13, showing that economic activity is slightly lagging market expectations of the French economy.
Market Consensus Before Announcement
The consensus looks for no revision in the final CPI report for March from increases of 0.2 percent on month and 0.8 percent on year in the flash. For HICP, the same: no revision from 0.2 percent on month and 0.9 percent on year.
Definition
The consumer price index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly and annual changes in the CPI represent the main rates of inflation. The national CPI is released alongside the HICP, Eurostat's harmonized measure of consumer prices. A flash estimate was released for the first time in January 2016 and is now published towards the end of each reference month.
Description
The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. In countries where monetary policy decisions rest on the central bank's inflation target, the rate of inflation directly affects all interest rates charged to business and the consumer. As a member of the European Monetary Union, France's interest rates are set by the European Central Bank.
France like other EMU countries has both a national CPI and a harmonized index of consumer prices (HICP). The HICP is calculated to give a comparable inflation measure for the EMU. Components and weights within the national CPI vary from other countries, reflecting national idiosyncrasies.
Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
France like other EMU countries has both a national CPI and a harmonized index of consumer prices (HICP). The HICP is calculated to give a comparable inflation measure for the EMU. Components and weights within the national CPI vary from other countries, reflecting national idiosyncrasies.
Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
