Inflation Rate MoM

What is Inflation Rate MoM?

Inflation Rate MoM is the 1-month change in the Harmonised Index of Consumer Prices (HICP). Its euro-area aggregate is the Monetary Union Index of Consumer Prices (MUICP). It averages national HICPs by household spending shares.

It tracks household final monetary consumption expenditure (HFMCE), cash spending inside the area. It excludes imputed rents for owner-occupied housing and purchases abroad. It is not a cost-of-living index, but a fixed-basket price gauge. Eurostat publishes no seasonally adjusted version, and a 12-month moving rate is also computed.

The European Central Bank (ECB) uses HICP as its gauge for price stability at 2% over the medium term.

When is it released and what happens each release?

Prices are collected for at least 1 working week around the middle of the reference month. Volatile items are observed over more than 1 week, on national timetables inside common rules.

A flash preview appears on the closing working day of the reference month or shortly after. Full tables follow 15 to 18 days after the end of the reference month, on an annual schedule. Releases appear at 11:00 Luxembourg time.

The flash shows the headline all-items rate plus 4 main groups and flash figures for member states. The full release adds full tables by country, component weights and point contributions to the annual rate. Figures are published as final, so gaps between flash and full values are not revisions. Mistakes are corrected without undue delay, so in practice revisions are rare.

What moves Inflation Rate MoM?

4 special aggregates split every release by shopping purpose, with energy as the usual swing factor.

• Services, 468.2 of 1000: recreation, transport and communication services, actual rents, maintenance, restaurants and holidays.
• Non-energy industrial goods, 252.2 of 1000: clothing, cars, furniture, electronics and other manufactured goods.
• Food, alcohol and tobacco, 189.4 of 1000: groceries and drinks at shelf prices, with processed food at 137.9 and fresh food at 51.4.
• Energy, 90.3 of 1000: electricity, gas, heating oil and transport fuels, the most volatile driver of monthly jumps.

The area index weights each country by its household spending share, with weights updated every year. Energy often drives sharp monthly moves while services move slowly. One member state can rise while another falls in the same release, so the headline can hide wide gaps.

How is Inflation Rate MoM calculated?

National institutes average sampled shop prices into sub-indices that meet EU rules. Area compilation then uses linked operations plus the monthly rate step.

• Elementary indices: average observed prices for sampled offers into sub-indices that meet EU rules.
• Unchain: divide each sub-index by its link-month value to measure change since the link.
• Aggregate: take a Laspeyres-type weighted mean with spending weights price-moved to the link month, using product and country shares.

• Re-chain: multiply the mean by the prior link-month chained index to link years into one series.
• Monthly rate: divide the chained index by its previous-month value, subtract 1 and multiply by 100 to state the result as a share.

An illustrative example follows the same steps with rounded figures. A link-month chained index of 120.0 times an average of 1.015 gives 121.8, so (121.8 divided by 120.0 minus 1) times 100 equals 1.5%. The energy slice in that example is 109.3 of 1000 times 6.2% for about 0.68 points of the move.

HICP is not a cost-of-living gauge. It excludes imputed owner rents, so owners' housing costs are missing while renters' actual rents count. It can thus understate homeowners' felt inflation when house prices or mortgage costs surge.