European producer-price inflation slowed for a second month in June as energy costs retreated and the euro-area economy cooled. Factory-gate prices in the 17-nation euro region increased 5.9 percent from a year earlier after rising 6.2 percent in May, the European Union’s statistics office in Luxembourg said today. That’s in line with the median forecast of 20 economists in a Bloomberg News survey. Prices remained stable from May. Crude-oil costs have dropped 17 percent over the past three months, easing pressure on companies to raise prices as the recovery shows signs of slowing. While the European Central Bank last month raised borrowing costs for a second time this year, European manufacturing growth slowed in July and economic confidence dropped to the lowest in almost a year as a worsening debt crisis clouded the region’s growth prospects. Energy prices at the producer level rose 10.7 percent from a year earlier after an 11.8 percent gain in May, today’s report showed. The cost of intermediate goods such as car engines and steel advanced 6.4 percent, down from a 6.6 percent increase in the previous month, while capital goods including equipment and machinery were 1.4 percent more expensive. To contact the reporter on this story: Simone Meier in Zurich at smeier@bloomberg.net To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

Source