Eurozone Producer Prices Indicate Inflationary Pressure

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The prices of goods leaving the eurozone's factory gates fell during October at the slowest annual rate since mid- 2013, a fresh sign that inflationary pressures are gradually returning to the currency area.

The European Union's statistics agency said Friday that producer prices rose 0.8% from September, and were down 0.4% from October 2015. The modest scale of the year-to-year decline was a surprise, since economists surveyed by The Wall Street Journal last week had estimated that prices were down 0.9%. Producer prices last fell at a slower annual pace in July 2013.

The surprisingly small decline supports other signs that consumer-price inflation is set to continue its recent rise over coming months. Figures released Wednesday showed consumer prices rose 0.6% year-over-year in November, having been below their year-earlier levels as recently as May.

But without a stronger pickup in domestic drivers of inflation, there are doubts about a more sustained increase toward the central bank's inflation target of just under 2%.

The figures are among the last pieces of economic data that will be available to European Central Bank policy makers as they prepare for their Dec. 8 meeting. With its ability to meet its target still in question, many analysts expect the ECB to announce an extension of its bond-buying program beyond its scheduled expiration in March 2017.

Write to Paul Hannon at

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