by Mathew Katz

Consumer prices fell in July by 0.6 percent, according to a report today by Eurostat, the European Union's version of the Bureau of Labor Statistics. That's far greater than initial forecasts of a 0.4 percent drop. According the to report, the drop was largely because of decreased demand in consumer goods and services.

Yesterday an IMF official told the European Community Board that deflation is not an immediate risk but can't be ruled out, either.

Eurostat also released some grim data about unemployment in July: it's up to 9.4 percent, up 0.1 percent from May. That's a 10-year high, though it's a lower number than expected. But what's scary are some of the numbers in the report: in Spain, unemployment is at 18.1 percent. In Estonia, unemployment jumped from 4.6 percent to 17 percent in the past year.