BERLIN, Aug 30 (Reuters) – Germany’s annual consumer price inflation accelerated to a fresh 13-year high in August, data showed on Monday, underlining growing price pressures as Europe’s largest economy recovers from the pandemic and companies struggle with supply shortages.
Consumer prices, harmonised to make them comparable with inflation data from other European Union countries (HICP), rose 3.4% compared with 3.1% in July, preliminary figures from the Federal Statistics Office showed.
The August reading was in line with a Reuters poll and marked the highest since July 2008, when the harmonised inflation rate also hit 3.4%.
The national inflation rate (CPI) even soared to 3.9% in August, hitting its highest since December 1993 when the economy boomed following German reunification.
“This is due to higher energy and food prices, while the core inflation probably even fell slightly form 2.9% to 2.8%,” Commerzbank analyst Ralph Solveen said. read more
Get back to me when it reaches a 100 year high. Now that was inflation!
I’ve read stories of 10,000 DM notes being found inside boxes of Cracker Jacks. It was “the prize.” .. Seriously
Know who else rose up to deal with German hyperinflation?
“This is due to higher energy and food prices, while the core inflation probably even fell slightly form 2.9% to 2.8%,”
Huh?
Inflation is DUE to higher prices? And the CORE inflation fell?
I guess I don’t understand economics – or the German was translated poorly.
izlamo delenda est …
Tim
CORE inflation specifically excludes Energy & Food which are much more volatile than regular goods.
A household can deal with Core inflation by choosing to buy something or delay a bit. Think of a non perishable somewhat durable item like a new couch. The seller generally bought it 6 months to 1 year ago & inventoried it quite a while ago. They have to be careful to not overprice it in an environment like a lock down. They know there is less money available that a house hold can spend during covid.
Food & Fuel are obviously volatile because they are perishable and generally not inventoried for a long period of time. When you buy Fuel, on that day, you are paying for the replacement cost of that Gallon of fuel.
Europe/Canuckistan’s Carbon taxes on Fuel immediately impact INFLATION essentially in real time. Inflation.
rPresident Turnip’s & Lady Turdeau’s policy of Paying People to stay home & Jerk Off instead of working raises Core inflation:
1) lack of workers = reduced inventory (replacement goods) prices go up because of shortages of supply. Stores increase prices because they can & secondly the eventual cost of replacing whatever they sell.
2) Consumers can alter their buying habits on Core inflation.
Think, Dad chooses not to buy a new set of Golf Clubs & Mom decides NOT to buy that new couch. (core inflation)
But I’m just a dumb HVAC Guy.
Eventually inflation becomes core inflation unless something significant changes the equation.
The Big Problem for High Dollar Germany is literally, “What if the Americans stop buying $60,000 Mercedes and switch to Honda/Toyota.” A US household can save 30 Grand by altering their spending choices (even though the Honda has increased their price by $3,000)
Kcir (cause I give a kcuf),
Thanks for the explanation. But if CORE inflation is falling (which implies that households are spending more), what’s driving the energy and food costs to greater heights? Unless, of course, these same households are eating and driving more – which should be contrary to the flu lockdowns. Or is Putin driving up the costs of energy in Western Europe (pipeline, &c.)?
Anyway, I’m just a DAP (Dumb Ass Plumber) trying to understand.
izlamo delenda est …
Don’t world wars generally break out, when this happens to Germany? 🤔
I’s jes’ sayin’… 🤭
Kcir (cause I give a kcuf)
SEPTEMBER 1, 2021 AT 8:32 AM
…that’s a great explanation of core inflation, thanks. I’m a financial numbskull myself so I appreciate someone who can walk me through it.