2 FEBRUARY 2012

Domestic PRODUCER PRICES fell -0.2% in December month-on-month (from +0.4% in November), the first cut in six months according to Eurostat figures and equally in the Euro area in an overall downward trend due to energy prices -0.4% decline (from +1% the previous month). The Euro area's deficit detection rules or fiscal compact failed to convince trading markets and heralded the region's accrued fragility as regards its Greek debt resolution. Nevertheless, Intermediate Goods producer prices solely inched down -0.2% while Capital Goods producer prices stayed flat for the second consecutive month.  Durable Consumer Goods producer prices moved down to nil due to feeble demand caused by a series of austerity measures throughout Europe and Non Durable goods recorded a similar pattern.

Equally to France, producer prices in Germany fell although more substantially, -0.4% while Italy's stayed unchanged and Spain's edged down -0.1%. In the UK, Europe's fifth economy besides the Euro area's four including France, producer prices decreased by 0.3%.

The overall trend affected all member states and in one year, overall producer prices mechanically moved down by one percentage point to +4.3%. France's prices performed equally and fell to +4.6%, Germany's to +4%, in Spain by a lesser one percentage point to +5.2% and in Italy by under one percent to +4%.
On the same period, energy producer prices decline to +9.5% (from +12.4% the previous month and annually) deflated the overall index the most as Intermediate Goods producer prices moved down to +2.8% or under one percentage point.  Capital Goods producer prices by contrast stayed on the rise and rose +1.5% along with Durable Goods +2.3% and Non Durable Goods +3.2%.