More expensive industrial goods and services have led to a recovery in inflation on euro area in January after months of falling prices, offsetting cheaper energy, according to data released on Tuesday.
The European Union’s statistics agency, Eurostat, confirmed a previous estimate that prices in the 19 countries using the euro rose 0.2% in January over the previous month and 0.9% in the annual comparison, as expected by economists.
Volatile energy prices advanced 3.8% in the month but are still 4.2% lower than a year earlier, while unprocessed food was 1.2% more expensive in the month and 2.0% on an annual basis.
Without these two volatile components, consumer prices fell 0.3% against December and were 1.4% above January 2020.
Eurostat reported that services, which account for two-thirds of the eurozone’s economy, contributed 0.65 percentage point to the final result of annual inflation, and non-energy industrial goods totaled 0.37 point. This compensated for the 0.41 point subtraction of cheap energy.
The January recovery brings inflation a little closer to the European Central Bank’s target of below but close to 2% in the medium term.