Chart, inflation : CPI and PPI drop in november

Okay folks, back to business. Enough of talking about airports ! 😉

Consumer Price Index and Producer Price Index reports for november have been published (source Bureau of Trade and Economic Indices).

The CPI slowed to +2,2 % (year on year = compared to november 2007), from +3,9 % the previous month.

For the PPI the fall is even more spectacular : 1,86 %, against 8,47 % in october !

cpinov

Why ? How ? There is only one reason : the crunch of oil prices.

But if we look at the details of the CPI report, we see :

-the group “Food and beverages” (= 36 % of the index) has increased… by 15,4 % in november compared to november 2007… And it has even increased by 1 % between october and november (month-on-month).

So watch out : yes the inflation pace is droping like a stone, thanks to energy prices. Drivers are happy. But the prices of food are still high. Much higher than one year ago.

-another group “Housing and furnishing” (= 23,86 % of the index) is droping big time year-on-year (-7,7 %) thanks to the sub-group “electricity, water”… But it’s artificial thanks to the “Samak rescue package” end of july (tax cut on diesel, free water and free electricity, read here). It won’t last.

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