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In each month's ISM Manufacturing and Non Manufacturing reports, respondents to the survey are asked whether or not they are seeing an increase or decrease in the prices of commodities they deal with. In this month's survey for the Manufacturing sector, respondents saw an equal number of commodities rising and falling in price (8) for the second straight month. The last time that the number of commodities rising in price did not outnumber the number of commodities falling in price for two straight months was back in July of last year.

As shown in the chart below, the three month average of the net number of commodities rising in price fell to 1.3 in June. Additionally, while there has been a lot of volatility in this indicator over the years, over the last two years the magnitude of the peaks and troughs has been contained The fact that inflation levels remain subdued is hardly new news. However, with skeptics questioning the integrity of traditional inflation measures like the CPI and PPI, this survey, which is based on the actual responses of businesses surveyed, provides further evidence that price levels remain contained.

(click to enlarge)