Signs of Peak Inflation

Today was a good day for those of us expecting to see peak inflation soon. July's US manufacturing purchasing managers (M-PMI) survey found that the M-PMI prices-paid index dropped to 60.0 from 87.1 in January. That's not surprising since the prices-paid and prices-received indexes that we compile from the five regional business surveys confirmed that inflationary pressures may be abating (charts below).

That's partly because supply-chain disruptions are easing as evidenced by order backlog and delivery time indexes in all these surveys. Furthermore, demand is slowing, but not cratering, according to these surveys.