| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 0.7% | 0.7% to 0.7% | 0.6% | 0.7% |
| Year over Year | 1.0% | 1.0% to 1.0% | 0.9% | 1.0% |
| HICP - M/M | 0.7% | 0.8% | ||
| HICP - Y/Y | 1.1% | 1.1% |
Highlights
CPI accelerated in February, rising 0.6 percent month-on-month compared to a 0.3 percent decline in January, while rising 0.9 percent year-on-year, after a 0.3 percent in January increase. Core inflation rose 0.3 percent in February and 0.9 percent from a year ago.
The result is below the initial readings which called for a 0.7 percent increase on the month and 1.0 percent year-on-year increase, which were also the Econoday median forecasts.
Prices for manufactured products increased 1.4 percent on the month, while those for services increased by 0.5 percent, and falling 0.2 percent and gaining 1.6 percent respectively from their year-ago levels.
Energy prices helped keep those gains in check, rising a 0.3 percent month-on-month and while falling 2.9 percent year-on-year. Electricity prices were down 3.6 percent, with petroleum products 2.2 percent less expensive. While lower, they didn't contract at a slower pace than in January.
The Harmonized Index of Consumer Prices showed a 0.7 percent increase month-on-month and 1.1 percent increase from a year ago. This measure is used to compare inflation across European economies.
Consumers will already be facing higher prices for fuels amid the conflict in the Middle East which will be reflected in the March results. Energy prices for at least the past year have had a calming effect on prices, but that is all about the change. Further uncertainty is being added by the Trump administration looking for new ways to levy tariffs on its trading partners after many of those imposed earlier were declared illegal.
Market Consensus Before Announcement
The consensus looks for no revision in the final from the flash with CPI up 0.7 percent on month and 1.0 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.