Euro area inflation rose by 6.1% in May, down from 7% in April, according to Eurostat’s flash estimate. In May, the Eurozone purchasing managers’ index for the manufacturing sector fell to a 36-month low at 44.8 from 45.8 in April, still higher than the preliminary estimate of 44.6, according to data released by S&P Global and the Hamburg Commercial Bank. On a cyclical basis, the index remained flat. The slowdown is due to energy goods and also to food goods.
Analyzing the main components of inflation, in fact food, alcohol and tobacco products record, according to estimates, an annual rate of 12.5% in May compared to 13.5% in April, followed by non-energy industrial goods (5 .8% compared to 6.2% in April), services (5% against 5.2% in April) and energy (-1.7%, against 2.4% in April).
According to the report, factory prices fell for the first time since September 2020. Unemployment in the Eurozone, on the other hand, fell to an all-time low in April. The unemployment rate was 6.5%, down from 6.6% in March, according to Eurostat data which revised the figure upwards compared to the previous estimate of 6.5%. The number of unemployed fell by 33,000 from March to 11.01 million and the youth unemployment rate decreased slightly to 13.9% in April from 14% the previous month.
On the subject of inflation, there is caution in Brussels. Based on past projections, “we are not yet satisfied with inflation estimates, but we will have new projections at our June 15 meeting, and these will give an updated picture incorporating the additional squeeze” of the last meeting: the ECB President Christine Lagarde in a speech to German banks. Lagarde explained that there is no evidence of core inflation that it has reached its peak: «To date, all the measurements monitored by the ECB are still strong. And whether they will remain so will depend above all on the balance of two forces: energy prices and wages».
