Here's a little something not to take too seriously. Today the Institute for Supply Management released its latest indexes, one of which is a price index for services. This is a number worth following since services continue to be the component of inflation that's staying stubbornly high.
However, ISM doesn't report a specific price increase or decrease. It surveys its members to find out how many say prices are going up and how many say prices are going down. Any index above 50 means prices, on average, are going up.
But how much? This is the sketchy part. ISM doesn't say, but you can make a reasonable assumption that the more people who are reporting price rises, the higher those rises are. Then you can do a bit of curve fitting to extract something that looks reasonable. Here it is:
This is dodgy. And it's probably more comparable to PPI than CPI, since it's based on a survey of corporate purchasing managers. However, one advantage of this is that it doesn't include housing prices, so that's not skewing their results. In the end, it suggests that services inflation is coming down faster than CPI indicates, which jibes with other market signals.
By itself this doesn't mean much. But combined with other trends it's yet another weakish indicator that inflation is already coming down significantly.
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