By Paul Hannon
The prices of goods leaving the eurozone's factory gates were higher than a year earlier in November 2016, the first time that has happened since mid-2013.
The rise in producer prices after almost 3 1/2 years of declines is a fresh indication that inflationary pressures are building within the currency area, although it is still far from certain that the European Central Bank will sustainably achieve its consumer-price inflation target of just below 2%.
The European Union's statistics agency said Thursday that producer prices rose 0.3% from October, and were up 0.1% from November 2015. It was the first year-to-year rise in prices since June 2013, and came as a surprise, since economists surveyed by The Wall Street Journal last week had estimated that prices were flat.
The rise in prices at the factory gates is in line with other signs that consumer-price inflation is set to continue its recent rise over coming months. Figures released Wednesday showed consumer prices rose 1.1% year-over-year in December, having been below their year-earlier levels as recently as May.
Economists expect consumer prices to rise even more rapidly in the early months of 2017 as earlier, sharp drops in energy prices fall out of the year-to-year comparison. However, central bankers fear that should the boost from energy prices fade, inflation may slide as the year advances.
According to the Eurostat figures, factory-gate prices of goods other than energy were also up on the year in Nov., the first rise since August 2013.
Recent business surveys suggest the rise in producer prices has accelerated. A survey of purchasing managers that was released Wednesday found costs for manufacturers and service providers rose at the most rapid pace in almost five years during December, prompting businesses to raise the prices they charged at the fastest rate since July 2011.
Write to Paul Hannon at firstname.lastname@example.org
(END) Dow Jones Newswires
January 05, 2017 05:15 ET (10:15 GMT)
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