Hot PMI Headlines Belie Onset Of Stagflation
Well, if you go by PMIs (a questionable proposition), the US economy continued to press ahead in January, despite an ongoing rise in COVID-19 deaths and the deleterious economic effects of regional containment measures aimed at curtailing the spread of the disease.
The flash read on IHS Markit's composite PMI for the US came in at 58. That was up from 55.3 in December.
The manufacturing gauge printed 59.1, well ahead of the 56.5 the market expected. The services index came in at 57.5, also bet
Under the unusual supply demand situation created by the pandemic, I can’t help but think there are fixed cost issues for manufacturing that are impacting inflation pressure on prices. Is this alleviated once demand picks up in that there is a volume level needed to absorb fixed costs?
Durables and home improvements were bought instead of vacations etc. last year, and so inventories were depleted and are now being replenished – so what?