Manufacturing survey shows inflation worries 'worse than pandemic era,' adding to Fed pressure
📰 source: cnbc_topnews · 💼 business
the ism manufacturing survey for july showed the fastest factory growth in over four years, with the index at 55.6 versus expectations for 54.0 and the best reading since may 2022. new export orders, backlogs, and a 6.3-point jump in production led the way. the employment gauge hit its highest since august 2022 and expanded for the first time in 33 months.
but price pressures remain intense. the prices index slipped to 71.1, still meaning nearly three-quarters of respondents reported higher prices — the 22nd straight month of that. industry executives called the pricing volatility and lead-time extensions 'worse than the pandemic era,' with one metals executive saying he yearns for the 'more manageable' covid chaos. ism respondents described consistent upward trends in pricing and lead times with no sign of slowing.
the report adds to pressure on the fed, which has held rates at 3.5%-3.75% all year. goldman sachs now tracks third-quarter growth at 2.4%. traders see a 64.5% chance of a hike at the september fomc meeting, though chair kevin warsh's recent comments left some ambiguity. analysts say the inflation picture tilts the scales toward tightening.
why it matters: ism manufacturing shows inflation still hot and fastest growth in years, likely pushing the warsh-led fed to hike rates in september.
source: cnbc_topnews
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