Consumer Price Index MoM

What is EU Consumer Price Index MoM?

The EU Consumer Price Index MoM is the month-on-month rate of the Harmonised Index of Consumer Prices for the European Union. Eurostat, the Statistical Office of the European Union, builds it from national data on household final monetary consumption expenditure. That concept covers money spending inside each Member State, including spending by visitors and excluding spending by residents abroad. It excludes owner-occupied housing costs and imputed rents, is not seasonally adjusted, is not a cost-of-living index and is not a national index.

Coverage and methods are harmonised across countries, so the result differs from national consumer price indices. The EU aggregate covers all Member States together and differs in composition and weights from the euro-area aggregate.

When is it released and what happens each release?

Prices are collected at least once across about one working week in the middle of the reference month. Products with sharp moves within the month are priced more than once. The full dataset and news release appear around the middle of the following month, usually 15 to 18 days after the reference month ends. The release for the first reference month of each year arrives later than usual to allow the annual update of weights.

A flash estimate covers the euro area only and appears at the end of the reference month. Each release prints annual and monthly rates for the European Union, the euro area and each Member State. It also shows contributions that explain each part's share of change. Figures stay final except for error corrections, and the move from flash to final is not treated as a revision.

What moves EU Consumer Price Index MoM?

Four special groups built from ECOICOP, the European classification of spending by purpose, drive the headline rate.

• Food, alcohol and tobacco: captures price moves in food, both processed and unprocessed, plus alcohol and tobacco.
• Energy: captures all energy sub-indices, mainly household fuels in housing costs plus transport fuels.
• Non-energy industrial goods: captures manufactured consumer goods excluding energy.
• Services: captures services prices, the largest of the four groups.

The groups often move in different directions, so one group can pull the headline down while another pushes up. Services usually carry large weight, while energy can swing sharply and food can move against the headline.

How is EU Consumer Price Index MoM calculated?

• Elementary aggregates: observed prices feed basic indices for narrow product groups.
• Short-term index: price changes since the price reference period are averaged using spending shares from a previous year, adjusted to reference prices.
• Weights: each year countries rebuild weights from national accounts spending and adjust them to represent the previous year. Weights are price-updated to the reference period and first used for the first index of the year.

• Chain-linking: each year the new short-term index is chained onto the previous level to keep one continuous series.
• EU aggregate: Eurostat unchains country indices, averages them with country spending-share weights and chains the result back.
• Monthly rate: the percent change of the chained index from the previous month, times 100 to express the result as a percent.

As an illustration with invented levels, an index rise from 125.10 to 125.22 gives about 0.1%. Each part contributes its own rate times its weight, so the sum of parts explains the headline.

The EU aggregate is not the euro-area aggregate, so it is not the series behind the European Central Bank 2% aim. The European Central Bank aims for 2% inflation over the medium term on euro-area developments. Owner-occupied housing stays outside the index because only money spending counts.