German inflation picks up tentatively in October: data

Jobless figures show no sign of ‘VW effect’

FRANKFURT, Oct 29, (AFP): Consumer prices in Germany, Europe’s biggest economy, rose by an estimated 0.3 percent in October, driven by higher costs for food and services, official data showed on Thursday.

The preliminary flash estimate could help assuage concerns of deflation in the eurozone as a whole, even if energy prices are continuing to fall.

Germany’s national inflation yardstick, the consumer price index, inched 0.3 percent higher this month, after stagnating in September, the federal statistics office Destatis said.

And using the Harmonised Index of Consumer Prices (HICP) — the barometer used by the European Central Bank — the inflation rate was back in positive territory, standing at plus 0.2 percent in October, following a drop in consumer prices in September.

The European Central Bank regards annual inflation rates of close to but just under 2.0 percent as conducive to healthy economic growth and has recently launched a raft of measures to kickstart prices and push area-wide inflation back up nearer that level.

A controversial programme of sovereign bond purchases, known as QE or quantitative easing, was rolled out in March and initially appeared to work.

But the economic slowdown in China and depressed oil prices have pushed inflation expectations back down again.

Last week, ECB chief Mario Draghi hinted at additional monetary easing in December if inflation expectations do not pick up soon.

The inflation data on Thursday were a preliminary flash estimate calculated from consumer price data for six of Germany’s 16 regional states.

Final data based on all 16 states were scheduled to be published on Nov 12.

Meanwhile, unemployment in Germany remains at record low levels, as recovery in Europe’s biggest economy remains on track and no fallout is apparent yet from the Volkswagen scandal, economists said on Thursday.

But the jobless figures could start to rise in the coming months as some of the huge number of refugees arriving in the country begin to sign on, economists said.

The unemployment rate — which measures the jobless total against the working population as a whole — stood at 6.4 percent in September, unchanged from August, the Federal Labour Office revealed in regular monthly data.

That is the lowest level since west and

east Germany reunited in 1990 after the fall of the Berlin Wall the previous year.

In concrete terms, the number of people registered as unemployed in Germany declined by a seasonally-adjusted 5,000 to 2.788 million.

That was slightly more than the decline of 4,000 that analysts had been expecting.

In raw or unadjusted terms, the jobless total decreased by 58,800 to 2.649 million and the unemployment rate fell to 6.0