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Inflation Roars Back in the Eurozone With New Highs in Germany, Italy, and France

December 5, 2022

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1:01 am

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29 comments

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Economics

Inflation data from St. Louis Fed amended with October data from other sources, chart by Mish

Yesterday, I commented on Inflation Around the World: How Does the US Compare to Canada and Europe? but have new sources for October data.

Year-Over-Year Eurozone Inflation Soars in October

Eurozone inflation is getting out of hand. For example, yesterday I said inflation in France peaked at 6.08 percent and fell to 5.55 percent ion September.
October looks grim across the board. Inflation in France soared to 7.10 percent, a new high.
Inflation in Germany hit a new high of 11.60 percent.
Of the Eurozone big four, Italy soared into the lead with a new high of 12.60 percent.
Spain fell to 7.30 percent.
The US fell to 7.75 percent.

Also, Canada remained flat at 6.90 percent. The UK made a new high at 9.60 percent.

Data Sources

St. Louis Fed Through September
ECB for October
UK for October
Canada for October

The St. Louis Fed uses the series CPALTT01USM659N for the US. But it only runs through September.

I used the series CPIAUCNS, Consumer Price Index for All Urban Consumers: All Items in U.S. City Average not seasonally adjusted which is what one needs to use for year-over-year comparisons.

My lead chart takes data from all those sources, through September only from St. Louis Fed, but the rest are official sources.

Eurozone Inflation Rips Higher

*Eurozone inflation chart from ECB link above.*

Baltic Countries

All of them border Russia on one side or another.

Estonia: 22.5 Percent
Latvia: 21.7 Percent
Lithuania: 22.1 Percent

The biggest ECB concerns are runaway inflation in Germany at 11.6 percent and Italy at 12.6 percent. Those are the first and third largest economies in the Eurozone respectively.

The second and fourth largest Eurozone economies are France at 7.1 percent inflation and Spain at 7.3 percent.

What a mess all around.

This post originated at MishTalk.Com.

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Correction

In several places I said “EU” rather than “EMU” the Eurozone countries.

Mish

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29 Comments

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Oldest Most Voted

Webej

3 years ago

So, what did I say [yesterday]?

I’m sure EU statistics don’t yet reflect the new geometric weight of energy expenses.

Inflation is sure to keep going up as the percentage of the economy going to energy increases.

Plus, the data & methods is not congruent, so you’re never quite sure what official statistics mean, let alone comparisons.

I live in 16.8%

The Baltics are among the most dependent on Russia for energy (along with Bulgaria/Moldova)

KidHorn

3 years ago

Europe reminds me of Switzerland during WWII.

GruesomeHarvest

3 years ago

No worries! The EU just placed caps on Russian oil. Energy prices should drop as centrally planned. What could go wrong?

Webej

3 years ago

Reply to GruesomeHarvest

They forgot to cap the price of all the other stuff.

8dots

3 years ago

Iran is an oil producer. Iran biggest oil terminal is in Khark, a small island in the northern Persian Gulf. Iran have a 1000km pipeline to the

Gulf of Oman. Our navy patrol both areas. If your most exclusive assets are so exposed, stay away from street fights. If Iran become bellicose, the whole region will inflame, inflation will rage. Khark will be castrated and Iran know it. Khark was under attack during the Iran/Iraq war 40 years ago.

prumbly

3 years ago

It’s really time for the US and its vassal states to stop supplying Ukraine with weapons, remove the sanctions and apologize to that nice Mr Putin… and then beg for some energy supplies. Know when you’re beat. That would be the rational thing to do, but unfortunately our leaders’ massive egos and low IQs would never allow this to happen.

8dots

3 years ago

normal inflation : 0 to 10%. // moderate inflation : 10% to 20%. // high inflation : 20% – 80%. // hyperinflation : 80% and above. US inflation is normal.

The European inflation is between normal and low moderate. Inflation tax the poor, the middle class and people on gov entitlements. High mfg wages keep with inflation. High mfg wages support the service sector. Inflation is gov preferred tool to cut debt. Inflation

reduce real estate values from very high to affordable. At the bottom, when there is no more hope for old small landlords, it’s time to buy.

Inflation is frog cooking.

Lip

3 years ago

Reply to 8dots

I find the term:

normal inflation

abhorrent.

Webej

3 years ago

Reply to Lip

It’s like mild myocarditis, or run of the mill crash.

Just the normal process of counterfeiting and adding it into the mix

Lisa_Hooker

3 years ago

Reply to Lip

Not to worry.

It’s like being slightly pregnant.

8dots

3 years ago

Within 5-8 years EU 30T debt will be cut by a half in real terms.

Lisa_Hooker

3 years ago

Reply to 8dots

Or,

In a few more years EU 30T debt will increase to 60T by money creation to support the poor and contain the riots.

vanderlyn

3 years ago

heating oil in nyc is up 58% in 2021 from 2020 and 34% from 2021 to 2022. the st louis fed are grifters. as bad as your thinking GDP is meaningful when it includes sending billions to ukraine and laundering money back to congress. GDP is over 40% government spending. let’s get real old buddy. shadow stats has inflation of currency supply M1, doing north of 120% from plague onset in 2020. if you think price inflation to live in amerika or germany is only gone up slightly, i’ve got a bridge in my brooklyn boro to sell you. we have decades worth of currency printing supply to see jack up pricing. fed balance sheet is up 10x since panic of 2008. much of it since plague shutdown of entire world. like ww2 level printing and borrowing.

8dots

3 years ago

Reply to vanderlyn

The River Cafe sell a chocolate Bklyn Bridge.

vanderlyn

3 years ago

Reply to 8dots

WENT to a wedding there in the 1900s. fun time

Winn

3 years ago

Hi Mish,

I read this just a few days ago.

Euro area annual inflation down to 10.0%

Is it preliminary?

What’s wrong within a few days?

Mish

3 years ago

Reply to Winn

Do not know how they average that or what month they referred to. September perhaps?

Euro Area 10.6 for October according to the ECB

That was my reference for the data.

France and Spain would pull the average lower.

https://www.ecb.europa.eu/stats/macroeconomic_and_sectoral/hicp/html/index.en.html

Esclaro

3 years ago

What’s up with Canada? They are looking like the cleanest dirty shirt in the inflation laundry shop.

MPO45

3 years ago

A prudent investor would note that Germany is already moving to new solutions on addressing their HVAC heating/cooling challenges.

https://www.reuters.com/business/energy/heat-pumps-hyped-up-holiday-wish-lists-european-households-maguire-2022-11-30/

I’m sure all the sharp wits around here have already compiled a list of the best heat pump manufacturers and their supply chains to invest and profit accordingly.

Mish

3 years ago

Reply to MPO45

I believe I question 250% to 550% efficiency.

“That equates to a 250% to 550% efficiency range, compared with 80% to 85% efficiency for older fossil fuel boilers, IRENA noted in a report on heat pumps released this week.”

MarkraD

3 years ago

Reply to Mish

Older boilers are more like max 75%, newer condensing boilers operate at upwards of 99%.

Heat pumps extract heat from external air, they work conditionally, much less efficient in colder temps.

The main caveat for heat pumps is they use electricity, which is more expensive per capita than natural gas direct fueled boilers.

A similar principle applies to electric vs gas water heaters, while electrics boast 99% efficiency vs gas heaters’ 60%, the electric is more expensive to run.

StukiMoi

3 years ago

Reply to MarkraD

Air-to-ground heat pumps, are much less affected by colder air.

Far, far, far and away the low hanging fruit wrt heating typically used building mass; is simply better insulation.

Aside from, perhaps, Northern Scandinavia and the highest Alpine, there is little need for heating of any European typical-office-and-residential-use buildings, aside from the heat given off by inhabitants, cooking, TVs etc., if the buildings are of half decent quality and design to begin with.

Half decent quality, does require half literate societies abstaining form barren-robbing half competent people of all their resources, though. Since half decent anything does require someone at a minimum half competent having access to at least some resources. To instead rely on mold in walls; of “homes” owned by illiterate Fed welfare queens; to do so, won’t work. Nor will putting dead guys’ faces on paper sheets while pretending to get richer from “my home” going up-up-up!

Maximus_Minimus

3 years ago

Reply to MPO45

There is a link in the linked article that has a schema diagram of principle of a heat pump. It doesn’t make sense.

1. A compressor comresses the gas which heats up, then moves to condensation chamber where it expands, cools, condenses and gives out heat.

2. The schema shows gas (again) leaving the condensation chamber, and into the expansion valve. The gas turns to liquid, and goes into evaporator. Fair enough. In the evaporator it mysteriously cools further before going back to the compressor again??? Why wastefully cool it when you want it heat.

If you want the heat generated by the refrigerator to pump into the heating system it makes slight sense, but how much electricity does it use?

This seams like perpetual motion machine reinvented.

Lip

3 years ago

Reply to Maximus_Minimus

In the evaporator the evaporation, or expansion, of the working fluid or gas requires heat. This heat is absorbed from the surrounding environment cooling the environment. This is basic PV = nRT or, if using phase change, heat of vaporisation.

In the condenser this absorbed heat is returned, plus the heat the compressor added, to the environment by cooling (perhaps condensing the working fluid, hence the name) the now compressed working fluid.

A heat pump does what the name says. It pumps heat from the evaporator to the condenser. It can do this despite the evaporator environment being colder than the condenser though the efficiency drops. Akin to a water pump and head.

Because it is pumping existing heat from one side to another and not heating the one side it can be more than %100 efficient as in it uses 1kW of electricity to pump 3kW of heat against a temperature differential (head in the case of a water pump) of say 20°C.

Note that as the outside temperature drops, the heat pump will become less efficient at heating which could be problematic. At -25°C a high efficiency heat pump is about 50% effective. Usually at around -20°C the efficiency of a heat pump will drop to below 100%. Depends on the design of the heat pump so beware.

In any case. Heat pumps have been in use since 1877 with their theory of operation dating back to 1852.

vanderlyn

3 years ago

Reply to Lip

my hero is Carrier. biggest boost to world wealth for 1900s. cities from phoenix to singapore would be small little shyt holes without AC

Webej

3 years ago

Reply to Lip

In Europe they are running heat pumps mainly with ground water as a source, not air as in much of the southern US.
With groundwater, I think you can easily hit multiples of 100%, especially when you are doing so at a neighbourhood scale and are doing the reverse in the summer, storing the heat below ground. Obviously the process has to be much better than just using the electricity to heat your house.

killben

3 years ago

As long as the sanctions force the hands of “God of Money” central banks, I am glad the clowns (politicians) are continuing with the sanctions circus.

whirlaway

3 years ago

The sanctions have boomeranged. Whooda thunk it? Anybody with a brain.Now, the EU clowns have set a price cap of $60/barrel on Russian oil.

God help the average European folks out there. Or… maybe they have to help themselves?

Lip

3 years ago

Reply to whirlaway

I believe that Russian oil is selling for lower than the cap (Brent – $30 ~ $55) at the present moment. Interested to see what happens once that is no longer the case.

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Inflation Roars Back in the Eurozone With New Highs in Germany, Italy, and France

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