Growth rate of new orders -1.7 vs -14.7 last month
Finished goods inventories 3.3 vs 1.2 last month
Wages and benefits 36.6 vs 45.8 last month
Capital expenditures 13.6 vs 14.2 last month
The inflation
Inflation
Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply in relation to the wealth produced (measured with GDP). As such, this generates pressure of demand on a supply that does not increase at the same rate. The consumer price index then increases, generating inflation.How Does Inflation Affect Forex?The level of inflation has a direct impact on the exchange rate between two currencies on several levels.This includes purchasing power parity, which attempts to compare different purchasing powers of each country according to the general price level. In doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.
Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply in relation to the wealth produced (measured with GDP). As such, this generates pressure of demand on a supply that does not increase at the same rate. The consumer price index then increases, generating inflation.How Does Inflation Affect Forex?The level of inflation has a direct impact on the exchange rate between two currencies on several levels.This includes purchasing power parity, which attempts to compare different purchasing powers of each country according to the general price level. In doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market. Read this Term metrics are sliding. Unfortunately, so are the growth measures.
Comments in the report:
Our order rate has decreased over the past month. We are only working four days on some of our equipment.
Although we continue to see surges in new orders, there are still
several uncertainties and key issues that give us pause on overall
business conditions.
We see the general economic situation worsening, but our customers are
still buying because the oil industry is still making money and they
see a bright future even though they will not talk about it. Therefore,
we have hired a few new people to support the business that is coming
over the next couple of months.
The personal electronics market shows signs of weakness and is expected
to weaken further. Other markets, especially automobiles, remain
strong. Inventory builds are reported throughout all channels.
There is no optimism in the most positive outlook. Interest rate hikes will hit our industry har (transport equip)
We are beginning to see a slowdown in requests for bids on projects.
We have seen a dramatic shift in consumer behavior and it is impacting
our volume. Beginning in May, demand for our premium products started
to wane as consumers shifted to less-expensive brands. This has
accelerated as fuel and other costs have risen.
Sales have started to slow this summer, as has our general outlook on business over the short and long term.
Workforce shortages remain. Hiring is expensive or nonexistent.
Customers are becoming more restless and looking for better service and
price. Inflation is on everyone’s mind. It is not a healthy
environment.
