Macro roundup: Normal service resumed

Greek consumers saw some price growth in June

There it is! After several months of watching inflation stay stubbornly negative in Greece, while rates picked up elsewhere, the EU-harmonised index of consumer prices increased 0.6 percent in June.

That’s a mighty jump in the rate from minus 1.2 percent in May. It’s also the first positive reading since March 2020.

It comes just a month after we noted that a gap had also opened up between the EU-harmonised reading and the national inflation measure, which increased to 1 percent in June from 0.1 percent the month before.

The gap between the two indices is still 0.4 percentage points — not negligible, but less than a third of the size of gap that prompted last month’s discussion.

Transport and housing — increasing 4.4 percent and 4 percent respectively — were the two components that led the index higher.

That’s basically energy costs, and is to be expected. But these components were also leading the national CPI index higher from earlier. Why transport, in particular, took so long to make its impact felt on harmonised index remains a bit of a mystery to me.

Inverse relationship

The unemployment rate increased to 17 percent in April from 16.8 percent in March, mostly as a result of people returning to the active labour force as the lockdown restrictions slowly started to ease.

Employment actually increased by 38,700 in the month, the most since September, but the number of people classed as inactive came down by 63,700 — again, the most since September.

This is repeating the pattern we saw last year, whereby a combination of furlough schemes and people not actively searching for work kept the rate down during the initial lockdown, only for it to then peak in summer when life returned back to relative normality.

Other data

Keen readers will have noticed that the newsletter didn’t go out last week, so we have two weeks worth of data to catch up on. Not that there was actually much last week.

  • Industrial production increased 14 percent in May, compared with an increase of 22.7 percent in April. Manufacturing increased 14.4 percent.

  • Greece’s manufacturing PMI reading increased to 58.6 in June from 58 the month before. May’s reading was already the highest in yonks (anything above 50 signals an expansion, and last month’s reading is now the highest in 20 years, according to IHS Markit.

  • The European Commission’s economic sentiment indicator also improved marginally in June — to 108.7 from 108.6. By segment, construction and industry are coming off recent highs, while consumer confidence also worsened a bit. But there was a marked improvement in services, which rose from 13.1 to 27.5.

Next week’s key data

Monday, July 12:
  • April building activity (Elstat)

Thursday, July 15:
  • January-June state budget execution (Finance Ministry)

Friday, July 16
  • May business revenue (Elstat)


No “elsewhere on the web” section again this week, but I don’t want to leave you completely empty handed. Whenever I write up the PMI numbers and the business surveys, I’m always left thinking of Numberwang from noughties sketch show That Mitchell and Webb Look. So here’s some Numberwang to set you off for the weekend.

I’d love to get your thoughts and feedback, either in the comments, on Twitter or by reply if you received the newsletter by email. If you’re not subscribed yet, consider doing so now.