CPI rose by 0.1% on the month in August. This was above our view but in line with consensus as well as the Riksbank’s forecasts. The year-on-year figure for CPIF-inflation tipped over to 1.2%, 0.1% point above the Riksbank’s view, but this will not have any impact on monetary policy.
The main surprise was prices for clothing and footwear, adding 0.4% point to the CPI compared to our call at 0.2% point. Prices for these goods have been very volatile this year, with a year-on-year figure at 3.3% in March, -1.1% in May and 2.8% in August. We will probably have to live with this volatility also going forward. Price developments for clothing and footwear should be relatively low in the coming months, not least as sales of clothing and footwear seems to have been sluggish due to the nice summer weather.
Prices for food declined in August as we had expected, but the downturn was a tad stronger than forecast, shaving off 0.10% point of the CPI (our forecast was -0.04% point). Thus, prices for food fell for the first time in 11 months. Most other components came out in line with our view, with for instance lower prices for foreign travelling and higher prices for electricity.
The trough for CPI as well as CPIF-inflation was in April this year. We see CPIF-inflation just above 1% for the remainder of 2013 while CPI inflation will rise gradually and will reach 0.7 by year-end, in line with the Riksbank’s forecast.
Details, August
CPI m/m: 0.09% (Nordea -0.04; consensus 0.1; prior -0.1)
CPI y/y: 0.1% (Nordea 0.0; consensus 0.1; Riksbank 0.0; prior 0.1)
CPIF m/m: 0.1% (Nordea 0.0; consensus 0.1; prior -0.1)
CPIF y/y: 1.2% (Nordea 1.0; consensus 1.1; Riksbank 1.1; prior 1.2)
CPI: 313.84 (Nordea 313.42, prior 313.55)
Nordea