| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Month over Month | 0.3% | 0.3% to 0.4% | 0.4% | 0.3% |
| Year over Year | 0.9% | 0.8% to 0.9% | 1.0% | 0.9% |
| HICP - M/M | 0.4% | 0.4% to 0.4% | 0.4% | 0.4% |
| HICP - Y/Y | 0.8% | 0.8% to 0.8% | 0.9% | 0.8% |
Highlights
Consumer prices rose 0.4 percent in June from May when they declined 0.1 percent, led by increased service prices, particularly for accommodations and transportation services. From June of last year, prices were 1.0 percent higher, compared to a 0.7 percent year-on-year increase in May.
Core inflation rose 0.4 percent in June and 1.2 percent from a year ago, while the HICP used for comparison against other European countries rose 0.4 percent on the month and 0.9 percent from a year ago.
Service prices were the largest contributor to the overall index, increasing 0.6 percent in June and 2.4 percent year-on-year. Within the sector, transportation costs shot up 3.7 percent in June and were 2.9 percent higher than a year ago.
Energy prices played a big part in mitigating price gains, having fallen significantly over the past year or so. In June, prices rose 0.6 percent and were down 6.2 percent on the year after falling 9.7 percent year-on-year in May.
At present, consumer inflation is below the ECB target, but should energy prices start creeping higher, one of the main brakes on prices could no longer be a factor.
Core inflation rose 0.4 percent in June and 1.2 percent from a year ago, while the HICP used for comparison against other European countries rose 0.4 percent on the month and 0.9 percent from a year ago.
Service prices were the largest contributor to the overall index, increasing 0.6 percent in June and 2.4 percent year-on-year. Within the sector, transportation costs shot up 3.7 percent in June and were 2.9 percent higher than a year ago.
Energy prices played a big part in mitigating price gains, having fallen significantly over the past year or so. In June, prices rose 0.6 percent and were down 6.2 percent on the year after falling 9.7 percent year-on-year in May.
At present, consumer inflation is below the ECB target, but should energy prices start creeping higher, one of the main brakes on prices could no longer be a factor.
Market Consensus Before Announcement
No revision expected in the final from the flash at up 0.3 percent on month and up 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.
