Producer prices again rose 0.3 percent on the month in October. The increase, which matched market expectations, was the fourth in a row but, with base effects quite strongly negative, still saw the annual headline PPI inflation rate drop 0.4 percentage points to 2.7 percent.
Energy prices were 0.5 percent firmer versus September and without this effect, the PPI would have increased a monthly 0.2 percent. In turn, this would have lifted the underlying yearly inflation rate by a tick to 2.7 percent. Compared with the previous month, intermediates gained 0.4 percent but capital goods were only flat and consumer goods fell 0.2 percent on the back of a 0.3 percent decline in non-durables.
The uptick in the annual underlying PPI rate leaves it just 0.3 percentage above its mark at the start of 2017. Pipeline inflation pressures in Germany would seem to be on the up but their impact on actual prices continues to feed through only slowly.