Consumer price inflation was surprisingly low in August. CPI grew 5.5% year-on-year and dropped 0.2 % month-on-month in August. In July, CPI stood 5.9 % above its level of July 2000. A considerable drop in prices of food and non-alcoholic beverages (-1.4 %) affected the month-on-month change in consumer prices. The decrease in food prices was due to drops in prices of fresh vegetables (-15.6 %), potatoes (-22.7 %) and fruit (- 6.9 %). The price growth of pork observed in previous months stopped, prices of beef dropped 0.6 %. Fuel prices fell by 1.7 % month-on-month, clothing and footwear got cheaper by 0.5 %. Seasonal prices of holiday stays abroad grew 5.2 % month-on-month, a significant price growth was observed also at heat and hot water (+1.4 %) and medicines (+1.6 %). CPI inflation adjusted for the influence of changes in regulated prices, tax adjustments and other administrative measures reached -0.3 % month-on-month. Net inflation (watched by the CNB) was -0.3 % month-on-month and +4.1% year-on-year.
Industrial output rose 9.3 % year-on-year in real terms in July. After adjustment for a different number of working days, the growth rate reduces to +6.9 %. Seasonally adjusted industrial production increased 2.7 % month-on-month. Industrial sales in real terms increased 5.7 % year-on-year (or +3.3 % after working days´ adjustment). According to the Czech Statistical Office, the growth of industrial production and sales was primarily due to the growth in mining and quarrying; manufacture of rubber and plastic products; manufacture of machinery and equipment; manufacture of electrical and optical equipment; and manufacture of transport equipment. Direct export sales of industrial enterprises grew 14.5 % and their share in total industrial sales amounted to 41.6 %. The share of foreign-controlled enterprises in total industrial sales stood at 41.2%. Employment in industry grew by about 5.1t people year-on-year. The average monthly nominal wage grew 7.6 % year-on-year. Labor productivity in industry rose 5.2 % year-on-year and unit wages costs rose 2.3 percentage points.
Registered unemployment rate in August reached 8.5 % (after 8.5 % in July). By the end of the month, job centers registered 443.6t job seekers. Compared with the same period of 2000, the number of job seekers decreased by 23.6t. In the course of August, 34.4t registered unemployed found a new job and job centers excluded 15.1t job seekers due to other reasons (rule breaks, retirement, etc.). 52.9 % of the unemployed in August were women and 13.3 % handicapped persons. The share of school leavers with all levels of education and juveniles in total unemployment amounted to 13.9 %. 35.4 % of registered job seekers received unemployment benefits in August. The lowest unemployment rate was measured in Prague-West (2.4 %), Prague-East (3.0 %), Central-Bohemian district of Benesov (3.2 %), and in Prague (3.4 %). Unemployment rate above 15 % was shown in Most (21.4 %), Karvina (18.1 %), Ostrava-City (16.9 %), and Teplice (16.6 %). There have been 7 job seekers for one vacancy on average in the Czech Republic, with the worst ratio found in the district of Karvina (41.9).
The Czech crown tracked euro/dollar on Monday. Domestic macroeconomic data had only little impact on the currency. CZK/EUR firmed to 34.11/14 from 34.16/18 late Friday. Against the dollar, the crown weakened to 37.96/98 from 37.77/79 at the end of the last week.
Bond prices jumped up in reaction to the optimistic CPI and industrial output data released in the morning. The bullish sentiment was not sustained, though, and a correction happened later in the day. Late in the afternoon, the state 6.95/16 bond was still 10bps above the Friday’s closing, yielding 6.78/74 %. The state 6.75/05 gained 15bps to 101.90/20 compared to Friday evening, yielding 6.10/01 %.
| Late on September 10 | bond yield | Late on September 7 |
| CZK/EUR | 34.11/14 | - | 34.16/18 |
| CZK/USD | 37.96/98 | - | 37.77/79 |
| State 6.75/05 | 101.90/20 | 6.10/01 | 101.75/05 |
| State 6.95/16 | 101.50/80 | 6.78/74 | 101.40/70 |
(Martin Kupka)