Eurozone inflation eases in May

(Sharecast News) - Eurozone inflation eased in May, according to final figures released by Eurostat on Wednesday.
Consumer price inflation fell to 0.1% from 0.3% in April, in line with the initial estimate and consensus expectations. Energy prices were the biggest drag, falling 11.9% compared to a 9.7% decline in April.

Meanwhile, the core rate of inflation was unchanged at 0.9%.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said energy inflation will remain depressed in the near term, though the trend in oil prices suggest that downtrend is now over.

"Details suggest that inflation in personal care services, such as hairdressing, and in some restaurants and other hospitality services rose as lockdowns were lifted, but it's too early to see whether this will be sustained."

Separate data from Eurostat showed that construction output in the euro bloc slid 14.6% in April following a 15.7% drop in March.

"Overall, production in construction in the euro area and EU has fallen to the lowest level recorded since the start of the series in 1995," Eurostat said.

Vistesen said the construction figures merely confirm what we already know, namely that output was crushed during lockdowns, primarily thanks to building sites being closed almost entirely in most major economies, with the notable exception of German sites.

"Overall, the slide in April was driven by another big fall in residential construction, while the decline in civil engineering was somewhat more modest than in March," he said.