ISM Manufacturing Index vs. U.S. Core CPI This chart shows that ISM Manufacturing Index leads U.S. Core CPI by 24 months. See also “ISM Manufacturing Index vs. S&P 500 Index” and “U.S. Core Inflation Expected Over the Next 21 Months.“ Click the Picture to Enlarge
Civilian Labor Force Growth vs. Inflation since 1962 This chart shows 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…
