Germany’s Inflation Accelerated in January on Surging Energy, Food Prices
By Jeff Black
The inflation rate, calculated using a harmonized European method, increased to 2 percent after rising an annual 1.9 percent in December, the Federal Statistics Office in Wiesbaden said today, confirming an initial estimate published on Jan. 27. That’s the fastest since October 2008. In the month, consumer prices fell 0.5 percent after rising 1.2 percent in December.
German companies have stepped up hiring and output to meet both increasing export orders and reviving domestic demand, fueling the economy’s fastest expansion on record last year. With unemployment at the lowest in almost two decades, companies may find it easier to pass on higher energy costs just as labor unions seek to push through more pay.
“There have been some commodity-price increases, but they are not yet visible in the core rate,” said Gebhard Stadler, an economist at BayernLB in Munich. “The German economy is looking very good at the moment.”
Non-harmonized inflation accelerated to 2 percent in January from 1.7 percent, today’s report showed. In the month, prices decreased 0.4 percent.
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