French August Inflation Rate Slows Faster than Expected

France's annual inflation rate fell to 1.0 percent in August of 2019 from 1.1 percent in the prior month and below an initial estimate of 1.1 percent. It was the lowest inflation rate since May, reflecting a drop in manufactured product prices.
INSEE | Rafael Gonzalez | 9/12/2019 7:15:15 AM
Manufactured product cost continued to fall (-0.9 percent vs -0.6 percent in July), driven by a decline in clothing and footwear prices (-1.4 percent vs 0.3 percent). In addition, other manufactured products cost dropped further (-0.4 percent vs -0.3 percent), particularly in new motor cars prices (-1.1 percent vs -0.5 percent). Finally, health cost fell at a softer pace (-2.9 percent vs -3.2 percent). 

On the other hand, food prices advanced faster (3.1 percent vs 3.0 percent), mainly fresh products (8.5 percent vs 6.8 percent) due to an increase in the prices of fresh vegetables (16.8 percent vs 10.6 percent) and a rebound in those of fresh fruits (1.0 percent vs -0.5 percent). Meantime, inflation was steady for energy (at 0.8 percent) and services (at 1.1 percent). 

Annual core inflation, which excludes public sector prices, the most volatile consumer prices and the tax measures, dropped to 0.7 percent in August from 0.9 percent in the previous month

On a monthly basis, consumer prices increased 0.5 percent in August, after a 0.2 percent fall in July, as manufactured product cost rebounded (0.9 percent vs -2.8 percent in July). Meanwhile, energy prices were stable (vs -1.1 percent) while services prices slowed down (0.4 percent vs 1.0 percent). Additionally, inflation was steady for food (at 0.5 percent). 

The harmonized index of consumer prices increased by 1.3 percent from the previous year, unchanged from July, while it rose by 0.5 percent month-over-month (vs -0.2 percent in July).

French August Inflation Rate Slows Faster than Expected