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German inflation edges up to 2.3% in July

German inflation edges up to 2.3% in July – DW – 07/30/2024

https://www.dw.com/en/german-inflation-edges-up-to-23-in-july/a-69810065

New data from Germany's federal statistics agency showed that inflation in July has increased compared to the previous year. The news came as a surprise after economists had predicted consumer prices to stabilize.

German inflation edges up to 2.3% in July – DW – 07/30/2024

Inflation in Germany rose unexpectedly in July, according to preliminary figures released on Tuesday.

New data released federal statistics agency Destatis on Tuesday showed that consumer prices were up 2.3% from a year ago.

The figures also represented a month-on-month upward trend compared to the 2.2% annual rise seen in June.

5 comments

ISOmorph

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Can someone explain those numbers to me, because I'm honestly lost. Is this article suggesting that prices in july 24 were 2.3% higher than in july 23? If yes, what are they measuring exactly? I just know that groceries and rent jumped about 20% compared to last year. Did some other stuff that I have no connection to get significantly cheaper? Do I live in the inflation capital of germany? What am I missing here?

rustydrd

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Yes, the 2.3% increase is the inflation rate for July 2024 versus 2023. Regarding the "how is it measured": This is an interesting topic.

Typically, inflation is measured by tracking a consumer price index (CPI) over time, which is a weighted average of prices for a wide selection of consumer goods (i.e., a typical "market basket") and other living expenses (e.g., rent). The weights are computed on the basis of surveys, and the prices are tracked in a decentralized manner by market watchers (both online and in stores). The German federal statistics agency has a documentation for their weighting method here. They also provide a tool for computing a personalized inflation rate that is adjusted to someone's individual consumer behavior.

One interesting part about rent is that it typically reduces estimated inflation rates when they receive a large weight in the computation, because large rent increases happen only when people move to a new apartment (which happens relatively rarely, so the impact of rent increases on yearly inflation is often relatively low). There are also other indices that use different weights and track different goods and services, so the inflation rate will be different for those.

ISOmorph

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Thanks for taking the time to explain all that. I'm still lost though. How the hell is the inflation, that I and all my friends and family are experiencing, 10 times higher than the national average? Like, all our rents got bumped up even without moving, supposedly due to energy prices surging. This is obviously a rethorical question, that I don't expect you to answer.

rustydrd

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I wish I had an explanation for that, because subjectively I feel the same.

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