Chart of the Day: Eurozone Inflation Edging Close to Zero


Hyperinflation is right around the corner! Oh, wait:

Consumer prices in the euro zone ticked ever closer to outright deflation, official data showed Tuesday, making it almost certain that the European Central Bank will move to ease monetary policy this week….Many economists say that inflation is already well below the danger zone for tipping into deflation, and some analysts have taken to calling the condition “lowflation.”

….The Governing Council of the European Central Bank, which meets Thursday, targets an inflation rate of just below 2 percent, a level that it has been undershooting for months. Adding to the pressure, a separate report showed the European labor market continuing to stagnate. The euro zone jobless rate came in at 11.7 percent in April, ticking down marginally from 11.8 percent in March, Eurostat said.

And what is the ECB planning to do about this? According to Gilles Moëc, the chief Europe economist for Deutsche Bank, “investors might be surprised to find that the scale of the central bank’s actions would probably be significantly smaller than those taken by other central banks, including the Federal Reserve in the United States.” That makes sense. After all, with unemployment at 11.8 percent and inflation close to zero, you can’t be too careful. One wrong move and inflation might skyrocket to 1 percent. And then where would we be?

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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