More Inflation Down the Road

Cooker

Was Yesterday's ISM an Early Warning For More Inflation Down the Road?

In addition to the Indian Central Bank's purchase of 200 tons of gold from the IMF, one reason for gold's strong rally today can be found in yesterday's ISM.  In each month's Report on Business, ISM publishes the results of its monthly commodities survey where it asks respondents which commodities are rising in price and which are declining.  In this month's survey, respondents saw price increases in eleven commodities and decreases in only one.  This month's net reading of +10 brought the three month moving average to eleven and is the highest level since September 2008.

The chart below compares the three month average net reading in the ISM Commodities Survey (CS) with the year over year change in CPI.  Over the last ten years, trends in the CS have often preceded moves in the CPI.  So when the net reading in the CS rises, increases in the CPI are typically not far off.  Therefore, given that the net number of commodities rising in price is currently at +10 from a low of -15 in February, don't be surprised if upcoming inflation reports come in on the high side of expectations.



November 03, 2009 at 02:21 PM

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rosyrosy

coexist

agree

牛二买刀

Fed has no other choice
They have to print as much as possible since inflation is better than deflation.

SunSea

I am not worried about inflation at all until I see some improvement of unimployment, the reason is simple: consumer consumption contributes more than 70% to US GDP, with high unimployment rate, the commodity prices will not be able to jump high (for instance the new home building number is still low which curtail the prices of all material related)

mengtt

stonehorse

想发

Thanks

sds

黄金石油等涨表明很多赌注在押通涨，但FED却告诉我们目前通涨不是问题，难道FED错估了形势？FED不就是想搞出通涨吗？搞到现在还没有通涨不正是FED所害怕的吗？"印钱就会通涨"是不能质疑的结论吗？如果没有通涨，那些赌注不就很快会坚持不住了吗？

busywind

ding