Global economic indicators suggest that price pressures are experiencing fluctuations across various sectors worldwide. Recent data compiled by S&P Global for J.P. Morgan indicates that while there has been a cooling effect on service sector inflation in major economies, there has been a resurgence of cost pressures within the manufacturing sector. These developments pose potential challenges to efforts aimed at controlling inflation rates, which remain higher than desired in many regions.

The latest composite Purchasing Managers’ Index (PMI) data shows that selling price inflation globally has slightly decreased, marking the second-lowest rate since the onset of the pandemic. Despite this moderation, prices continue to rise at a level that surpasses the standards seen before the pandemic, indicating ongoing inflationary pressures. The PMI Prices Charged Index fell marginally from the previous month, hinting at a possible slowdown in inflation in the near future, aligning with a projected decrease in global Consumer Price Index (CPI) inflation.

Notably, the recent trend of cooling service sector price trends has been juxtaposed by a renewed momentum in manufacturing sector inflation, posing a fresh challenge in the global battle against persistent consumer inflation. Increases in service sector input costs have slowed, while selling price inflation has tempered but remains elevated historically. On the other hand, manufacturing sector input costs have surged, leading to higher prices for goods and services.

The rise in manufacturing input costs is primarily driven by reports of elevated raw material prices and increasing wage costs, with supply chain pressures relatively subdued. Despite some disruptions in global shipping routes, supplier delivery times have only slightly lengthened in June, indicating that overall, suppliers have the capacity to meet demand efficiently.

Furthermore, reports suggest that the recent uptick in manufacturing orders, coupled with reports of demand-pull price pressures emerging, may continue to contribute to inflationary challenges on a global scale. This is evident in various major economies, with Russia and the UK experiencing sharp increases in selling price inflation. Conversely, countries like Japan, France, and Italy have seen more modest price increases, contributing to the overall picture of varied inflation rates across different regions.