from
(snip)"The GDP-weighted PMI for prices has historically been an excellent indicator of inflation. It would seem that the drop in the year-on-year headline CPI inflation rate from 2.7% in January to 2.2% in February was temporary phenomenon as the PMI indicator indicates inflation of closer to 3% over the next month or two."(snip)
(snip)"However, when factoring in the absolute change in the oil price from a year ago, CPI could overshoot to a number in excess of 3%."(snip)
The Purchasing Manager's Index essentially tracks the prices that corporate purchasing dep'ts are paying for necessary 'inputs' to their business. This theoretically provides a leading indication of rising consumer prices, since it usually takes some amount of time for the rising 'input' costs to translate into higher wholesale / retail prices.





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