Wednesday, July 02, 2008

ISM Price Index Highest Since 1979

Although the markets interpreted the latest ISM Manufacturing report as bullish news because the headline index rose above the key 50 level, the details were more bearish. Both production and new orders were basically flat and employment turned more negative. And even more importantly, the prices paid index rose to a full 91.5, the highest since July 1979. Yeah, that's right, this price indicator signals the worst inflationary pressures since before Paul Volcker broke the back of the great inflation of the 1970s. While one should take the exact levels of these kind of survey based numbers with a grain of salt, this is consistent with the sharp increase in market price numbers we've seen and so clearly indicates very strong inflationary pressures.


Blogger VVi11y said...

Hi Stefan. I would like your thoughts on a discussion in this thread regarding inflation:

Particularly these posts:

The poster is criticizing positions held by people like Peter Schiff whom you like. He is basing his material from a friend that works in statsCan.

4:41 PM  
Blogger stefankarlsson said...

I didn't find anything new in that thread. What he really said was that because other statisticsl authorities use the same inflation measure as the Canadian then it's OK, which BTW first of all is a non sequitur even had it been true, and secondly isn't really true since some countries do not fully implement to the same extent as U.S. and Canadian statistical authorities the kind of adjustments that they implement.

9:26 PM  

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