Eurozone inflation at record high
Eurozone consumer prices rose by a fresh record high of 5.8 per cent in February from 5.1 per cent in January, amid fears that the war in Ukraine will drive up the cost of living and increasing pressure on the European Central Bank (ECB) over when to...
Eurozone consumer prices rose by a fresh record high of 5.8 per cent in February from 5.1 per cent in January, amid fears that the war in Ukraine will drive up the cost of living and increasing pressure on the European Central Bank (ECB) over when to adjust monetary policy.
Economists had forecast inflation to rise to 5.4 per cent. Core inflation that excludes energy, food, alcohol and tobacco jumped to 2.7 per cent from 2.3 per cent in the previous month. On a monthly basis, the harmonised index of consumer prices moved up by 0.9 per cent. The jump in the cost of living in the eurozone pushed inflation to well above the ECB’s two per cent target.
Meanwhile, economic activity in the US grew at a modest to moderate pace since mid-January, according to the Federal Reserve’s Beige Book. The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the 12 Fed districts, noted that many districts reported that the surge in COVID-19 cases temporarily disrupted business activity as firms faced higher levels of absenteeism.
The Federal Reserve also noted that consumer spending was generally weaker than in the prior report, which was released in early January. With regard to inflation, the Beige Book said prices charged to customers increased at a robust pace across the nation, with a few districts reporting an acceleration in the pace of price growth.
Finally, German unemployment retreated to pre-pandemic levels in February, two years after the coronavirus brought large parts of the economy to a halt, official figures published on Wednesday showed.
The jobless rate stood at five per cent in February on a seasonally adjusted basis, according to the Federal Labour Agency. That is the same level as in February 2020. Employment had followed a steady “upwards trend”, Federal Labour Agency chairman Detlef Scheele said in a statement, despite Germany’s economic struggles around the turn of the year.
The impact of the war in Ukraine is “not yet reflected in the figures”, Scheele said, with the potential that the economic fallout from the Russian invasion at the end of February could unsettle the labour market once again.
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