Mar 2, 2015 5:26 AM
Eurozone consumer prices fall again in Feb but pace eases
The Associated Press
BRUSSELS (AP) The fall in consumer prices across the 19-country eurozone eased in February, official figures showed Monday, in a development that will likely assuage market concerns that the region is set to suffer a pronounced period of deflation.
Eurostat, the EU's statistics agency, said annual consumer prices fell 0.3 percent in February compared with a year earlier, half the rate recorded in January. The decline was also slightly less than anticipated the consensus in the markets was for minus 0.4 percent.
Still, the eurozone has suffered a drop in prices for three consecutive months and getting inflation back toward target remains the European Central Bank's primary policy motive. It's due to start a massive bond-buying program this month as part of a drive to get inflation back toward its target of just below 2 percent.
Proponents of the stimulus, which is set to be worth around a trillion euros ($1.12 trillion), say the policy can help shore up the recovery in the eurozone and support prices by reducing the borrowing costs for businesses, households and governments. The associated fall in the currency the euro is trading at near decade-lows against the dollar could also help boost growth by making exports cheaper and push prices up by making imports more expensive.
In a separate encouraging development, Eurostat reported that unemployment across the eurozone fell to 11. 2 percent in January, its lowest level since April 2012. Though the rate masks huge divergences across the region, it's another indicator showing that the eurozone's economic recovery is gaining some momentum. Compared with December 2014, the number out of work fell by 140,000.