April ISM Falls, Prices Paid At Highest Since July 2008, "No Commodities Down In Price"

Tyler Durden's picture

The April ISM is out, and while it confirms last week's declining Chicago PMI data and the fact that the Japanese contraction has not even remotely impacted US businesses yet (and it will), the recent weakness predicted by various Fed diffusion indices is being confirmed. The ISM came at 60.4, a decline from 61.2 in March, primarily a a result of a fall in Production (-5.2), New Orders (-1.6) Supplier Deliveries (2.9) and Imports (-1.0). All of these metrics will drop far more once the Japanese contraction is truly appreciated. On the other hand, inventory restocking is still working its artificial growth miracles, rising by 6.2 to 53.6. Yet the most important metric as always remains the Price Paid, which after rising once again from 85.0 to 85.5, above expectations, is at the highest since July 2008. Then again, by now our thesis of (more than) transitory inflation can be appreciate by everyone.

ISM historical:

Index summary:

Survey respondents"

  • "Rapidly rising raw material costs putting extreme pressure on profits." (Food, Beverage & Tobacco Products)
  • "Plastic resin product prices are climbing so fast that [suppliers]
    are attempting to increase prices on orders already accepted but not
    [yet] delivered." (Chemical Products)
  • "Customers are rebuilding safety stock levels of inventory, and
    also trying to buy ahead of material price increases." (Plastics &
    Rubber Products)
  • "Market continues to get stronger month over month. Recovery is faster than anticipated." (Transportation Equipment)
  • "Pressure from offshore suppliers continues to mount with exchange
    rate increases and seasonal demand for capacity." (Miscellaneous

And a listing of commodities up (and down lol) in price as well as in short supply"


Commodities Up in Price

Aluminum (8); Aluminum Products (4); Brass (5); Caustic Soda (2); Chemicals (2); Cocoa/Cocoa Powder (3); Copper (9); Copper Based Products (6); Copper Wire; Corn (8); Diesel (5); Electric/Electronic Components (2); Fuel Oils (4); Fuel Surcharges (2); High Density Polyethylene (2); LDPE; Natural Gas; Oils and Lubrication; PET (2); Plastics (4); Plastic Products (4); Plastic Resins (6); Poly Bags; Polyethylene (3); Polyethylene Resin (4); Polypropylene (4); Resins (2); Resin Based Products (2); Rubber (2); Rubber Products (3); Silver (2); Solvents; Stainless Steel (6); Steel (8); Steel — Cold Rolled; Steel — Galvanized; Steel Products (5); Titanium Dioxide; and Transportation Rates (2).

Commodities Down in Price

No commodities are reported down in price.

Commodities in Short Supply

Capacitors; Electric/Electronic Components (4); Nuts — Food; and Titanium Dioxide (2).

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TraderMark's picture

No worries - it's all transitory.

scatterbrains's picture

OT but I thought it was interesting how gold jump out of the gate up 15 dollar on heavy volume at what is normally a thin low volume hour on globex last night. I suspect someone with deep pockets is getting tips on when oblamo's press crew is gearing up for some announcement, which normally would not be such a big deal, unless someone knows of a major policy shift that's being cooked up that will be extremely bullish for gold coming soon. Once the leak hit that a major announcement was coming, somebody front ran the news only to find out a few minutes later that it was just Osama being killed Gold promptly dumped hard. How else do you explain the huge move higher then the sharp dump ? Why would someone buy gold on news of Osama's death ? Maybe there is another announcement coming and somebody got faked out thinking this was it?

breezer1's picture

gold and silver are the shock troops in the currency war.

whatsinaname's picture

if dats the case march em higher.

ghostfaceinvestah's picture

Oh look, the Fed printed another $7B+ this morning, wonder what will happen to commoditiy prices?

slewie the pi-rat's picture

"All of these metrics will drop far more once the Japanese contraction is truly appreciated. On the other hand, inventory restocking is still working its artificial growth miracles, rising by 6.2 to 53.6." 

well, at lease we have excess capacity!  and let's get somebody right on financing those backorders!  c'mon, people, focus!

tmosley's picture

But Spalding said everything was ok now that silver is $42.

Oh wait...

sbenard's picture

The only thing transitory in the impact of rising input costs is how "transitory" will be this recovery. Crude oil hit $114.82 this morning so far, gold has already hit another all-time record, and the Dollar is hitting new lows every day.

So much for the Osama bin Laden windfall. Stocks are nearly back to flat again. That benefit also transitory!

kito's picture

sorry, we are blowing the inflation issue out of proportion. RJA and RJI have both been trending lower the past month. not saying it couldnt reverse, but its hardly blazing a path towards hyperinflationary at this time.