Released: 21 May 2021
Sales Managers Report Prices Rising Fast in May
Most U.S. economic data releases currently compare present activity with activity levels a year ago, or with the previous month. Both measures give unreliable results at the moment due to the rapid descent of activity a year ago, and its rapid recovery in recent months since the vaccination program started to reduce hospitalisations.
Sales Managers data are different, and allow better comparisons to be made.
Business Confidence Index data - now at a 20 month high - is derived from questions relating to expected activity over the next few months, so makes no comparison with the period impacted by Covid. On the basis of "animal spirits", the immediate future is looking rather good. [Log-in for charts and data].
The Sales Growth Index asks respondents the direction of current market activity - again largely unrelated to events of a year ago. Steady growth is apparent. [Log-in for charts and data].
The Prices Index questions relate simply to current market conditions - are prices rising, stable or falling. The majority of replies suggest that prices are rising very fast right now. Prices are obviously rising fast in relation to prices of a year ago. But the Sales Managers data suggests that prices may now be rising as a result of the ultra loose monetary policies being pursued by many western Governments, as well as short term commodity bottlenecks associated with Covid. If this is the case, the price rises are not likely to subside as we move further into the post Covid world.
June Sales Managers data, due out in the 3rd week should be interesting!
United States: Headline Sales Managers Index (SMI)
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