€-inflation details – Underlying inflation remains slightly too strong

Details confirm core rate above ECB target

According to the final figures from Eurostat and the ECB, consumer prices in the euro area excluding energy, food, alcohol and tobacco (core rate) rose by a seasonally adjusted 0.19% in March compared to February. Although the core rate is below the average of the preceeding three months, it is still above the ECB target of a year-on-year rate of 2%. If we adjust the official core rate for one-off effects, it would even be slightly higher than published by the ECB today.

However, the one-off effects we identified were small in March: if we adjust the month-on-month core rate for seasonal effects using our preferred method (X-13 ARIMA model), the core rate in March would be 0.21%. In the past months, the X-13 ARIMA method was less prone to fluctuations. Prices for particularly volatile services, such as transportation services or package holidays, also rose in March in line with previous months. For this reason, there is hardly any need for adjustment here either. Adjusted for all one-off effects, the month-on-month core rate is therefore 0.20%.

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