Germany’s consumer inflation rose to 2.2 percent year-on-year in August 2025, up from 2.0 percent in July, according to preliminary figures released by the Federal Statistical Office. On a monthly basis, the Consumer Price Index edged up 0.1 percent from July, signaling that price pressures remain embedded in Europe’s largest economy.

Core inflation, which excludes volatile food and energy prices, remained steady at 2.7 percent, underscoring that services and consumer goods are continuing to drive inflation. Goods prices rose by 1.3 percent, while energy prices declined by 2.4 percent. Although energy costs are still falling, the pace of decline has slowed compared with July’s 3.4 percent drop.

Food inflation gathered pace, climbing to around 2.5 percent. Sharp increases were reported in coffee, fruit juices, and fresh produce, with cucumbers, tomatoes, and berries recording some of the steepest gains. These pressures at the household level are feeding into broader concerns about consumer spending and purchasing power.

The harmonized index of consumer prices (HICP), the measure used by the European Central Bank, registered at 2.1 percent—slightly above the ECB’s 2 percent target. Analysts note that while inflation remains elevated, the pace is not alarming enough to prompt immediate monetary tightening.

At the same time, Germany’s labor market is showing strain, with unemployment climbing above 3 million for the first time in a decade. This combination of rising prices and weakening employment raises questions about the resilience of the German economy heading into the final quarter of the year.