PMIs Paint Mixed Picture on Consumer Pass-Through

Dow Jones
Sep 24

1231 ET - The PMI data signals downstream price pressures remain intense, but it shows a more mixed picture of pass-through to consumers, according to Pantheon Macroeconomics. "The composite PMI input prices index jumped to a 46-month high of 66.1, from 58.9, reflecting the renewed upward climb in energy prices. But the manufacturing output prices index dipped to 59.2, from 59.4," Senior US Economist Oliver Allen says is in a note. He adds that while this still leaves the index consistent with much firmer core goods expectations over the next few months, he still expects upward pressure on core goods inflation from energy prices to be offset by tariff-driven price increases dropping out of the year-over-year comparison. This should dovetail with further weakness in many core services components brought on by slowing wage growth.

 

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