Inflation in Germany has weakened slightly for the first time since July. Consumer prices rose by 10 percent in November compared to the same month last year, as the Federal Statistical Office announced in an initial estimate on Tuesday. Earlier, the annual inflation rate rose for three consecutive months, reaching 10.4 percent in October. Economists see no reason to give the all-clear in the decline.
Inflation has been fueled by energy and food prices for months. According to preliminary figures, energy cost 38.4 percent more in November than a year earlier. An increase of 43 percent was recorded in October. Food prices rose 21 percent in November. Compared to October, consumer prices fell by a total of 0.5 percent.
The comparatively high inflation leads to a loss of purchasing power and increasingly devalues salaries. In the third quarter, income was nominally 2.3 percent higher than in the same period last year. However, the increase was more than eaten up by higher consumer prices. The bottom line was a real wage loss, i.e. adjusted for price developments, of 5.7 percent. This was the highest decline since the statistics were introduced in 2008.
In the previous three quarters, people had already had to accept losses in real wages. The values accelerated from -1.4 percent in the final quarter of 2021 to -1.8 percent at the beginning of the year to -4.4 percent in the second quarter of 2022. Statistically, such a long period of real wage losses has not yet occurred. The gross salaries including special payments are included in the nominal wages.
According to a survey, many people are tightening their belts because of rising prices. According to their own statements, a good half of consumers only buy products that they really need, as reported by the market research company Nielsen IQ based on a survey of more than 10,000 people.
According to economists, a thorough easing of inflation is not in sight for the time being. The inflation rate should not drop significantly until spring, because then the gas and electricity price brakes will take effect and the contribution of oil to inflation will decrease, as Commerzbank chief economist Jörg Krämer argues.
Inflation rates at the current level have never existed in reunified Germany. In the old federal states, rates of around 10 percent were measured in the early 1950s. However, the calculation method has changed over time.
Note: This article has been updated.
