The Blubber

Per Reuters

A recent survey by the Institute for Supply Management showed how raw material prices started to increase in February. This comes as contracted US manufacturing dropped for the fourth month straight.

The ISM said that the price increase for raw materials came due to more sellers were interested in "filling order books" while "buyers now see the need to reorder." This has resorted in a better relationship balance between suppliers and buyers.

The survey also showed how higher prices resulted in resistance by buyers. New York Brean Capital's senior economic advisor Conrad DeQuadros gave a statement regarding how the contraction in manufacturing doesn't suggest a recession.

DeQuadros: "Manufacturing continues to contract but not at a sufficiently rapid pace to suggest a recession in the overall economy at this point, while prices of raw materials appear to have risen,"

Last month, only four manufacturing industries reportedly showed growth. 14 other industries reported contraction during the same period.

Here are the four industries that showed growth in February

• Transportation equipment
• Electrical equipment
• Appliances
• Components

Here are some of the other industries that showed contraction in February:

• Paper products
• Textile mills
• furniture
• nonmetallic mineral products
• computer products
• electronic products

Capital Economics deputy chief US economist Andrew Hunter shared a statement regarding the concern that the signals could entail. It was noted, however, that the index remained consistent.

Hunter: "This is a potential concern to the extent that it signals that recent economic resilience is putting renewed upward pressure on inflation... But that index is still consistent with a sharp fall in the headline CPI rate."

Recently, a research paper revealed how the Federal Reserve would need to raise interest rates higher to bring down inflation. The Bank of America expects the second half of 2023 will be affected by the delay of a recession in the US.

See flow at unusualwhales.com/flow.

Other News:

• The Federal Reserve is unlikely to be able to bring down inflation without having to raise interest rates considerably higher, causing a recession, per a research paper
• Bank of America expects the second half of 2023 to be affected by the delayed US recession

Resources:

Reuters