{"id":502023,"date":"2010-04-01T14:10:23","date_gmt":"2010-04-01T18:10:23","guid":{"rendered":"http:\/\/www.businessinsider.com\/chart-of-the-day-ppi-crude-materials-vs-ism-manufacturing-indeces-2010-4"},"modified":"2010-04-01T14:10:23","modified_gmt":"2010-04-01T18:10:23","slug":"chart-of-the-day-todays-ism-manufacturing-report-screams-inflation","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/502023","title":{"rendered":"CHART OF THE DAY: Today’s ISM Manufacturing Report Screams Inflation"},"content":{"rendered":"
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Today’s ISM Manufacturing index result blew away expectations, hitting 59.6 vs. an expected 57. March ISM data shows the fastest U.S. manufacturing expansion since July 2004<\/a>.<\/p>\n

Yet hidden underneath the powerful headline ISM number is an even more powerful break-out by the ISM Prices sub-index<\/em>, which is a component of the total ISM.<\/p>\n

As shown by the black line below, the ISM Manufacturing Prices index jumped 8 points in March, to 75 from 67. This signals a sharp rise in inflationary pressure. According to the ISM, 17 industries reported paying higher prices on average in March and no industry reported paying lower prices.<\/p>\n

Furthermore, as shown below by the Producer Price Index (PPI) for crude materials in orange below, a rise in the ISM Prices Index makes a rise in the PPI highly likely, as highlighted by Waverly Advisors<\/a>.  This means we should expect more confirmation of inflationary forces in the near future.<\/p>\n

Which means you can pretty much put the final nail in deflation’s coffin. The real threat is inflation, especially given the recent liquidity-bias of the U.S. fed, and today’s ISM result has moved Ben Bernanke one step closer to pulling the trigger on interest rates.<\/p>\n

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