Euro-area consumer prices rose 1.6 percent in May from a year earlier after increasing 1.5 percent in April, the European Union statistics office said. That’s the fastest inflation since December 2008.
Labor-cost growth accelerated to 2.1 percent in the first quarter from a year earlier from 1.7 percent in the fourth quarter, a separate report showed today.
The euro’s 14.5 percent drop against the dollar this year is pushing up inflation just as rising energy prices hurt consumers’ purchasing power. European Central Bank President Jean-Claude Trichet said on June 10 that inflation might further accelerate even with the euro region’s economy seen expanding at only a moderate pace” this year.
Consumer prices increased 0.1 percent from April, when they rose 0.5 percent, today’s report showed. Prices for alcohol and tobacco increased 4.4 percent from a year earlier, while energy costs rose 9.2 percent, today’s release showed. Prices for clothing, household equipment and hotels also rose.
The region’s core inflation rate, which excludes volatile energy and food costs, held at 0.8 percent in May.