Inflation Remains Mixed Across Euro Area, Declines in U.S. and Japan

In June 2014, annual inflation as measured by the Harmonized Index of Consumer Prices (HICP) declined in the U.S. and Japan, but was mixed across Euro Area countries compared.

Although inflation remained steady in the Euro Area as a whole, price growth slowed in Belgium (from 0.8 to 0.7 percent), France (from 0.8 to 0.6 percent), Italy (from 0.4 to 0.2 percent) and Spain (from 0.2 to 0.0 percent), while it accelerated in Germany (from 0.6 to 1.0 percent), Austria (from 1.5 to 1.7 percent) and the Netherlands (from 0.1 to 0.3 percent). Outside the Eurozone, Sweden (0.5 percent), the United Kingdom (1.9 percent), Norway (1.8 percent) and Denmark (0.4 percent) also experienced rising prices. Switzerland experienced the largest decline in inflation (from 0.2 to -0.1 percent), returning to deflationary territory after two months of positive price growth.

"In June, inflation in the Euro Area as a whole held steady at its lowest level (0.5 percent) since the Great Recession," said Elizabeth Crofoot, Senior Economist with the International Labor Comparisons program at The Conference Board. "But the broad range of inflation rates among member states—from negative or zero to nearly two percent—highlights the difficulty in setting a common monetary policy that will have a common impact on prices. However in Japan, the slight dip in inflation (from 4.5 to 4.4 percent), the first since January, suggests that the combined impact of recent monetary expansion and an increased sales tax may be easing."

June inflation remains below 1 percent in all Euro Area countries compared, except Austria (1.7 percent) and Germany (1.0 percent). Inflation is also above 1 percent in Japan (4.4 percent), the U.S. (1.9 percent) and Norway (1.8 percent). June inflation was lower than price growth a year ago in all countries compared except Japan, the U.S., and Sweden.

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