This month’s data also shows how important it will be to parse the distinction between the “end of the supply chain resolution disinflation” and growing disinflationary pressure from slackening demand for upstream inputs.
In May, Manufacturing PMIs fell while Services PMIs posted surprisingly strong growth.
Aggregate industrial production was unchanged month-over-month in the April data, translating to a decline of 0.4% year over year.
PPI for All Commodities increased by a substantial 0.9% month over month, representing an increase of 0.1% year over year. We may be reaching the very tail end of any remaining deflation from post-pandemic supply chain resolution.
Overall, the Q1 GDP print looks weaker overall than the previous print, with investment growth correspondingly weaker.
