In a post earlier today we noted the fact that the Prices Paid component of the ISM Manufacturing report, which came in at 37.5 in June, was the lowest monthly reading since April 2009. Another inflation related indicator we like to track in the monthly ISM reports is the survey where they ask participants which commodities are up and down in price over the last month.
In this month's report, there were only two commodities that participants said were up in price over the last month. This was the lowest monthly reading since May 2009. On the other end of the spectrum, the number of commodities that were down in price shot higher from nine last month to sixteen this month. This was the highest monthly reading since December 2008! We said it earlier, and after looking at the data on commodities that were up and down in price, we'll say it again. Based on the inflation data in today's ISM Manufacturing report, the Fed has little to worry about with regards to inflation.