ISM Manufacturing Index vs. U.S. Core CPI (Leading Indicator) This chart suggests that the ISM Manufacturing Index leads U.S. Core CPI by 24 months. You may also like “ISM Manufacturing Index vs. S&P 500 Index” and “U.S. Core Inflation Expected Over the Next 21 Months.“ Click the Picture to Enlarge
U.S. Core Inflation Expected Over the Next 21 Months (Leading Indicator) This chart shows the U.S. core CPI expected over the next 21 months. It has been quite accurate for more than 20 years. The chart suggests that M2 velocity year-over-year leads U.S. core CPI by 21 months (R² = 0.61 since 1996). You may also…
U.S. Labor Force vs. Inflation The chart shows the enduring link between labor force and inflation. The chart also suggests that U.S. labor force leads U.S. CPI by three years. Demographic trends imply subdued inflation. You may also like “World Population & Demographics – More People Over 65 than Under 5 for the First Time.”…
Civilian Labor Force Growth vs. Inflation since 1962 This chart suggests that civilian labor force growth leads CPI by four years. Picture source: Bank of America Merrill Lynch
U.S. Consumer Prices Index vs. PMI Input Prices Index This great chart shows U.S. Consumer Prices Index (annual % change) vs. PMI Input Prices Index. Let us keep in mind that a low CPI is positive to extend this business cycle. Picture source: IHS Markit
Why Is Core Inflation So Low Compared To Previous Business Cycles? The Consumer Price Index Less Food & Energy (Core CPI) is very low compared to previous business cycles in the US, for several reasons: – not fast-rising money supply – globalization: inflation is a global phenomenon – lack of wage acceleration – increase in…
