Monday, May 2, 2011

Inflation Warning from ISM; No Commodities Down in Price

Bernanke's money printing madness is having the expected maipulated boom---just brace yourself for the accompanying price inflation.

The Purchasing Managers Index registered 60.4 percent, a decrease of 0.8 percentage point when compared to March's reading of 61.2 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

The PMI report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management, Manufacturing Business Survey Committee:
The recent trend of rapid growth in the manufacturing sector continued in April as the PMI registered above 60 percent for the fourth consecutive month. The New Orders and Production Indexes continue to drive the PMI, as they have both exceeded 60 percent for five consecutive months. Manufacturing employment appears to have developed significant momentum, as the Employment Index readings for the first four months of 2011 are the highest readings in the last 38 years. Inventory growth also took place in April after two months of destocking; however, the inventory restocking would appear to be necessitated by the strong performance in new orders. While the manufacturing sector is definitely performing above most expectations so far in 2011, manufacturers are experiencing significant cost pressures from commodities and other inputs.
Of the 18 manufacturing industries, 17 are reporting growth in April, in the following order: Wood Products; Plastics & Rubber Products; Primary Metals; Transportation Equipment; Fabricated Metal Products; Computer & Electronic Products; Apparel, Leather & Allied Products; Machinery; Textile Mills; Paper Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Chemical Products; Printing & Related Support Activities; and Petroleum & Coal Products. Furniture & Related Products is the only industry reporting contraction in April.

ISM reports the price inflation warnings from respondents:

•"Rapidly rising raw material costs putting extreme pressure on profits." (Food, Beverage & Tobacco Products)
•"Plastic resin product prices are climbing so fast that [suppliers] are attempting to increase prices on orders already accepted but not [yet] delivered." (Chemical Products)
•"Customers are rebuilding safety stock levels of inventory, and also trying to buy ahead of material price increases." (Plastics & Rubber Products)
•"Market continues to get stronger month over month. Recovery is faster than anticipated." (Transportation Equipment)
•"Pressure from offshore suppliers continues to mount with exchange rate increases and seasonal demand for capacity." (Miscellaneous Manufacturing)

Commodities Up in Price

Aluminum (8); Aluminum Products (4); Brass (5); Caustic Soda (2); Chemicals (2); Cocoa/Cocoa Powder (3); Copper (9); Copper Based Products (6); Copper Wire; Corn (8); Diesel (5); Electric/Electronic Components (2); Fuel Oils (4); Fuel Surcharges (2); High Density Polyethylene (2); LDPE; Natural Gas; Oils and Lubrication; PET (2); Plastics (4); Plastic Products (4); Plastic Resins (6); Poly Bags; Polyethylene (3); Polyethylene Resin (4); Polypropylene (4); Resins (2); Resin Based Products (2); Rubber (2); Rubber Products (3); Silver (2); Solvents; Stainless Steel (6); Steel (8); Steel — Cold Rolled; Steel — Galvanized; Steel Products (5); Titanium Dioxide; and Transportation Rates (2).

Commodities Down in Price

No commodities are reported down in price.

Commodities in Short Supply

Capacitors; Electric/Electronic Components (4); Nuts — Food; and Titanium Dioxide (2).

1 comment:

  1. Now you and Krugman aren't even disagreeing on the *future*, you're disagreeing on the present...