| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Month over Month | -0.9% | -1.1% to -0.8% | -1.0% | 0.4% |
| Year over Year | 1.2% | 1.0% to 1.4% | 1.2% | 0.9% |
| HICP - M/M | -1.1% | 0.5% | ||
| HICP - Y/Y | 1.1% | 0.8% |
Highlights
Consumer prices are seen rising 1.2 percent in September following a 0.9 percent increase in August, according to preliminary figures released today.
A 4.5 percent decline in energy prices wasn't enough to mitigate a 2.4 percent increase in services, which rose from the August reading of 2.1 percent. Food prices also ticked higher, increasing 1.7 percent from September of last year, up from a 1.6 percent reading in August, with other food products 1.8 percent more expensive than a year ago.
Prices for manufactured goods are seen falling 0.4 percent in September, extending the 0.3 percent decline registered in August.
On a month-on-month basis, prices are expected to fall 1.0 percent in September, a marked contrast to the 0.4 percent gain in August. This is due to a seasonal effect from a sharp decline in transportation, notably airfares and accommodations.
The HICP used to compare inflation among European economies is seen rising 1.1 percent after a 0.8 percent gain in September.
Prices are still within the comfort zone of the European Central Bank, and not likely to give the ECB pause.
A 4.5 percent decline in energy prices wasn't enough to mitigate a 2.4 percent increase in services, which rose from the August reading of 2.1 percent. Food prices also ticked higher, increasing 1.7 percent from September of last year, up from a 1.6 percent reading in August, with other food products 1.8 percent more expensive than a year ago.
Prices for manufactured goods are seen falling 0.4 percent in September, extending the 0.3 percent decline registered in August.
On a month-on-month basis, prices are expected to fall 1.0 percent in September, a marked contrast to the 0.4 percent gain in August. This is due to a seasonal effect from a sharp decline in transportation, notably airfares and accommodations.
The HICP used to compare inflation among European economies is seen rising 1.1 percent after a 0.8 percent gain in September.
Prices are still within the comfort zone of the European Central Bank, and not likely to give the ECB pause.
Market Consensus Before Announcement
CPI expected down 0.9 percent on the month in September versus an increase of 0.4 percent in August. On year, expectations call for an increase of 1.2 percent versus 0.9 percent in August.
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.
