Saturday, August 2, 2025

Latest

Stagflation Fears Mount as PMIs Suggest Surging Costs, Slowing Production

Despite ongoing weaknesses in several sectors of the US economy, the recovery appears to be gaining momentum, as both the Services and Manufacturing side recorded improvements in March. However, the ongoing global supply disruptions have caused significantly higher prices to ensue, with the rate of cost-push inflation soaring by the most on record.

According to the latest IHS Markit reading, the Services PMI increased from 59.8 to 60.0 in March, marking the strongest expansion since July 2014. Similarly, the Manufacturing PMI rose from 58.6 in February to 59, which is slightly below the cycle high recorded at the beginning of the year.

With respect to manufacturing, new orders increased from 57.4 to 60.8, marking the ninth straight month of expansion and the highest print since June 2014. However, the most alarming headlines were about inflation, as both service and manufacturing costs have been sent soaring. Ongoing global supply chain disruptions have caused input costs to surge across the US service sector in March. Likewise, amid mounting supply shortages and input delays, US manufacturing companies recorded the fastest rise in input costs in over ten years.

Simultaneously, firms have been attempting to pass down some of the higher costs to consumers, as demand for both goods and services has been soaring to multi-year highs. “Producers were increasingly unable to keep pace with demand, however, due mainly to supply chain disruptions and delays. Higher prices have ensued, with rates of both input cost and selling price inflation running far above anything previously seen in the survey’s history,” explains IHS Markit Chief Business Economist Chris Williamson.

When adjusted for seasonal factors, the IHS Markit Flash US Composite PMI Output Index came in at 59.1 in March, marking the second-fastest private sector expansion in six years.

As Williamson suggests, it is becoming increasingly apparent that stagflation is on its way: “firms sought to partially pass greater input prices through to clients, with the rate of charge inflation the sharpest on record,” he said. Firms commonly reported slower output growth due to a lack of raw materials to fulfil new orders. The rate of production growth was the slowest since last October,” he concluded.


Information for this briefing was found via IHS Markit. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Why Gold’s Bull Run May Just Be Getting Started! | Peter Grandich

Tariffs Spark New Race for Critical Metals | Rob McEwen

Antimony Resources: The Bald Hill Project

Recommended

Tsunami Warnings Spread As Largest Quake Since 2011 Hits Russia

Northern Superior Intersects 1.75 g/t Gold Over 65.0 Metres At Philibert

Related News

Bank of Canada Raises Interest Rates Another 25 Basis Points to 5%

As was widely expected, the Bank of Canada raised its overnight rate by another 25...

Wednesday, July 12, 2023, 10:02:39 AM

US Consumer Prices Increase 0.3% In January, With Annual Inflation At 3.1%

The Consumer Price Index for All Urban Consumers experienced a 0.3% increase in January, marking...

Tuesday, February 13, 2024, 09:00:19 AM

January CPI Print Points To 7.5% Inflation Over The Last 12 Months

The latest inflation data is in and it appears that the caution provided by the...

Thursday, February 10, 2022, 09:08:11 AM

America’s Not-So-Transitory Inflation Skyrockets Past Expectations… Again

Another month gone, another doozy CPI print. American consumers continued to be hammered in the...

Thursday, October 14, 2021, 10:18:00 AM

Eurozone Inflation Soars to 2% for First Time Since 2018

In yet another sign that mounting inflation is becoming pronounced around the globe, for the...

Wednesday, June 2, 2021, 03:34:00 PM