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[webfact]

German inflation rises sharply, unemployment falls

 

 

BERLIN: -- Inflation in Germany has jumped due to costlier energy and food.

 

Consumer prices in the eurozone’s biggest economy were up by 1.7 percent in December from the same month a year earlier.

That is close to the European Central Bank’s inflation target of at or just below 2 percent.

 

The reading was much higher than November’s increase of 0.7 percent.

 

‘Stop the stimulus’

 

The news set off a chorus of calls for the ECB to start winding down its stimulus measures, which include ultra low interest rates and bond buying through money printing to push cash into the economy.

 

“This jump in inflation is a signal to exit from the ECB’s expansive monetary policy,” the head of the Ifo Institute for Economic Research, Clemens Fuest, told the Frankfurter Allgemeine Zeitung. “If these figures are confirmed for the eurozone as a whole (on Wednesday), the ECB should end the bond buy programme in March 2017.”

 

Politicians from Chancellor Angela Merkel’s conservative CDU/CSU bloc echoed Fuest’s call.

 

“The policy of zero interest rates, coupled with rising inflation, is devastating for German savers,” Bavarian Finance Minister Markus Soeder told Handelsblatt business daily.

 

However rising prices could be a negative for the German economy because they reduce people’s purchasing power. It has been relying on private consumption, a booming construction sector and government spending for growth.

 

More people in work

 

At the same time the inflation figures were released we learned unemployment in Germany had fallen more than expected in December – keeping the jobless rate at a record low of six percent of the workforce, on a seasonally adjusted basis.

 

Frank-Juergen Weise, the head of the Federal Labour Office announced, the government’s headline numbers, which are not adjust for seasonal factors such as weather. He told reporters: “The average unemployment for the whole of 2016 was 2,691,000. The last time unemployment was this low was 1991.”

 

He added that demand for workers continues to be very high and the German government is optimistic about the labour market in 2017 because domestic consumption remains strong.

 

Full story: http://www.euronews.com/2017/01/03/german-inflation-rises-sharply-unemployment-falls

 

 

-- © Copyright Euronews 2017-01-04

 

[ilostmypassword]

“This jump in inflation is a signal to exit from the ECB’s expansive monetary policy,” the head of the Ifo Institute for Economic Research, Clemens Fuest, told the Frankfurter Allgemeine Zeitung. “If these figures are confirmed for the eurozone as a whole (on Wednesday), the ECB should end the bond buy programme in March 2017.”

 

Politicians from Chancellor Angela Merkel’s conservative CDU/CSU bloc echoed Fuest’s call.

 

“The policy of zero interest rates, coupled with rising inflation, is devastating for German savers,” Bavarian Finance Minister Markus Soeder told Handelsblatt business daily.

1.7% inflation too high?  This is nuts.  What makes it worse is that this isn't a core inflation figure but includes volatile energy and food prices. And even then it hasn't reached the target of 2%.This is just an excuse from the same people who said QE would bring on massive inflation and that austerity was the only road to a true recovery.  

[12DrinkMore]

2 hours ago, ilostmypassword said:

“This jump in inflation is a signal to exit from the ECB’s expansive monetary policy,” the head of the Ifo Institute for Economic Research, Clemens Fuest, told the Frankfurter Allgemeine Zeitung. “If these figures are confirmed for the eurozone as a whole (on Wednesday), the ECB should end the bond buy programme in March 2017.”

 

Politicians from Chancellor Angela Merkel’s conservative CDU/CSU bloc echoed Fuest’s call.

 

“The policy of zero interest rates, coupled with rising inflation, is devastating for German savers,” Bavarian Finance Minister Markus Soeder told Handelsblatt business daily.

1.7% inflation too high?  This is nuts.  What makes it worse is that this isn't a core inflation figure but includes volatile energy and food prices. And even then it hasn't reached the target of 2%.This is just an excuse from the same people who said QE would bring on massive inflation and that austerity was the only road to a true recovery.  

 

The Germans are very sensitive about inflation.

 

Why do we "need" any inflation anyway?

[lannarebirth]

13 minutes ago, 12DrinkMore said:

 

The Germans are very sensitive about inflation.

 

Why do we "need" any inflation anyway?

 

To foster the illusion of "growth".

[ilostmypassword]

1 hour ago, lannarebirth said:

 

To foster the illusion of "growth".

So the world economy is no bigger than it was in 1960?

[lannarebirth]

3 minutes ago, ilostmypassword said:

So the world economy is no bigger than it was in 1960?

 

Sure it is, lots bigger as we continue to exhaust finite resources and bring more people's standards of living higher. Some of the growth, in monetary terms is due to inflation, especially in more developed nations.

[Scott]

Inflammatory post removed along with reply.  

[elgordo38]

7 hours ago, webfact said:

That is close to the European Central Bank’s inflation target of at or just below 2 percent.

Just imagine if people woke up and with a pencil and paper not a computer and sat down and figured out THEIR true cost of living. I keep hearing this 2% inflation figure bandied about it seems that the government has made this a one size figure fits all.

[Roadman]

Unemployment the lowest it has been since 1961...but...but....there was a flood of immigrants at the same time that were going to cripple Germany under their weight. What has been obvious even while the doomsayers were harping was that they were melding into the German production machine quite reasonably. Merkel got it slightly wrong letting in the immigration flood in the abrupt manner she did but she is right with the German birth rate collasping, and without looking at age bands being currently hidden by the extended mortality rate, that the country's core population base is in desperate need of yet more immigrants. 

[ilostmypassword]

4 hours ago, lannarebirth said:

 

Sure it is, lots bigger as we continue to exhaust finite resources and bring more people's standards of living higher. Some of the growth, in monetary terms is due to inflation, especially in more developed nations.

The environmental issue you raise is a different one entirely.

As for growth, which are playing catchup to the more developed nations, inflation tends to be higher.  But the point is whether purchasing power per capita has increased or decreased. It's irrelevant whether an individual unit of currency is worth less or more. 

[ilostmypassword]

2 hours ago, elgordo38 said:

Just imagine if people woke up and with a pencil and paper not a computer and sat down and figured out THEIR true cost of living. I keep hearing this 2% inflation figure bandied about it seems that the government has made this a one size figure fits all.

Next to no one has a personal inflation rate of 2%.  It depends on what you spend your money on. If you're a billionaire with a penchant for acquiring art by Old Masters, your personal inflation rate has skyrocketed.

[elgordo38]

1 hour ago, ilostmypassword said:

Next to no one has a personal inflation rate of 2%.  It depends on what you spend your money on. If you're a billionaire with a penchant for acquiring art by Old Masters, your personal inflation rate has skyrocketed.

Daddy Warbucks I am not but the cost of everything especially in the west is way up there. For the sake of disclosure these figures are from my daughter in the west a very astute shopper.

[ilostmypassword]

29 minutes ago, elgordo38 said:

Daddy Warbucks I am not but the cost of everything especially in the west is way up there. For the sake of disclosure these figures are from my daughter in the west a very astute shopper.

For a long time lots of people have been complaining about the accuracy of the inflation figures from the CPI of the U.S. government. So someone at MIT got the bright idea to do something that became the billion prices project. Essentially, it used the internet to scan prices on everything that could be bought - but not services - to come up with a more accurate analysis of inflation.  And lots of doubters about the official government figures were really looking forward to disproving what the government was saying. Anyway,  I think you see where this is heading.  The billion prices projects results very closely matched those computed by the the U.S. government.

http://www.financialsense.com/contributors/matthew-kerkhoff/mit-vs-shadowstats-who-s-right-on-inflation

What differences there are can be explained by the fact the the Billion Prices Project doesn't survey the price of services.  So the labor component is left out.  Given that for most of its life wages were rising very slowly, it stands to reason that the project would slightly outpace the CPI. But over the length of its life, not by much.

[elgordo38]

2 hours ago, ilostmypassword said:

For a long time lots of people have been complaining about the accuracy of the inflation figures from the CPI of the U.S. government. So someone at MIT got the bright idea to do something that became the billion prices project. Essentially, it used the internet to scan prices on everything that could be bought - but not services - to come up with a more accurate analysis of inflation.  And lots of doubters about the official government figures were really looking forward to disproving what the government was saying. Anyway,  I think you see where this is heading.  The billion prices projects results very closely matched those computed by the the U.S. government.

http://www.financialsense.com/contributors/matthew-kerkhoff/mit-vs-shadowstats-who-s-right-on-inflation

What differences there are can be explained by the fact the the Billion Prices Project doesn't survey the price of services.  So the labor component is left out.  Given that for most of its life wages were rising very slowly, it stands to reason that the project would slightly outpace the CPI. But over the length of its life, not by much.

I can remember years ago before and after retirement for a number of years I was receiving a decent cola around 4-5% then suddenly certain things that were climbing in price fast disappeared from the basket. I have read stories over the years about how governments are fudging the basket why? well obviously as pensioners are a large segment of society it is a savings to cut our COLA and as they now have workers down to ridiculously low raises like 1 to 2% they would not want us to look like we are living off the fat of the land. Then they have this energy and food and core rate business. Yes the price of these two staples have fluctuated in the past but recently it is just up up and away. Then we look at smaller packaging and yes my daughter tells me this is happening in the west as well. One small example of coffee candies that I buy on a regular basis is that I have noticed lately opening some of the small packets and they are empty or broken with parts missing edges chipped of all a savings for the producer. This is just one example and there are many others. This 2% inflation increase ceiling is constantly bandied about governments everywhere but little mention of the fact that it might go higher. Sorry I am very skeptical of government numbers along with everything else that they do for us the "common" people.

[ilostmypassword]

11 minutes ago, elgordo38 said:

I can remember years ago before and after retirement for a number of years I was receiving a decent cola around 4-5% then suddenly certain things that were climbing in price fast disappeared from the basket. I have read stories over the years about how governments are fudging the basket why? well obviously as pensioners are a large segment of society it is a savings to cut our COLA and as they now have workers down to ridiculously low raises like 1 to 2% they would not want us to look like we are living off the fat of the land. Then they have this energy and food and core rate business. Yes the price of these two staples have fluctuated in the past but recently it is just up up and away. Then we look at smaller packaging and yes my daughter tells me this is happening in the west as well. One small example of coffee candies that I buy on a regular basis is that I have noticed lately opening some of the small packets and they are empty or broken with parts missing edges chipped of all a savings for the producer. This is just one example and there are many others. This 2% inflation increase ceiling is constantly bandied about governments everywhere but little mention of the fact that it might go higher. Sorry I am very skeptical of government numbers along with everything else that they do for us the "common" people.

If you go to the BLS page, they take all this stuff into account. And anyway, the Billion Prices Project is not government funded. It's strictly private.

[Grubster]

I remember when inflation was really high in the US, when most were working in gainful employment. We put the lid on that for 35 years and now most are underpaid, underemployed, unemployed or working for some form of government. I don't think inflation is such a bad thing.

[elgordo38]

14 hours ago, ilostmypassword said:

Project is not government funded. It's strictly private.

Either or they are both not to be trusted. When dealing with "private" doubt comes to mind when dealing with "governments" I know I am being out and out lied to. I think we should both go our own ways on this one. Sorry. 

[ilostmypassword]

17 minutes ago, elgordo38 said:

Either or they are both not to be trusted. When dealing with "private" doubt comes to mind when dealing with "governments" I know I am being out and out lied to. I think we should both go our own ways on this one. Sorry. 

As Patrick Moynihan is said to have remarked, "You are entitled to your own opinions but not your own facts."