ISM Manufacturing Prices Index
A monthly survey gauge showing whether U.S. manufacturers are broadly paying higher or lower input prices.
Full explanation
The ISM Manufacturing Prices Index is a sub-index in the Institute for Supply Management’s Manufacturing PMI Report. It asks manufacturing purchasing and supply executives whether prices paid for inputs are higher, the same or lower than in the prior month. A reading above 50 generally indicates that price increases are more widespread than price decreases. The index is closely watched because it is released early in the month and can provide a timely view of pipeline inflation pressure in the goods-producing sector.
Why traders watch it
Input prices can affect inflation expectations, producer margins and monetary-policy pricing. For traders, the index can matter most when it confirms or challenges the market’s view on inflation, supply-chain pressure, tariffs, commodities or Federal Reserve policy.
Market interpretation
- USD
- A stronger prices reading may support the dollar if it raises rate expectations, but it can also be interpreted negatively if it points to margin pressure or weaker real demand.
- Rates
- Higher-than-expected input-price pressure may lift yields through inflation expectations, while softer readings may reduce inflation-risk pricing.
- Commodities
- The index can be read alongside energy, metals and freight costs to assess whether cost pressure is broadening or fading.
Stronger vs weaker outcomes
A higher reading means more surveyed manufacturers reported paying higher input prices, which may indicate broader cost pressure.
A lower reading means price increases are less widespread, or price declines are more common, which may indicate easing input-cost pressure.
Higher readings generally signal broader manufacturing input-cost pressure; lower readings generally signal easing pressure.
Typical volatility
High. The index can move markets when inflation is a dominant theme, especially because it is released with the headline ISM Manufacturing PMI and other sub-indexes.
Trading considerations
- Read the prices index alongside new orders and production to distinguish inflation pressure from demand strength or weakness.
- Compare the signal with commodity prices, supplier-delivery conditions and official Producer Price Index data.
- Remember that the index measures breadth of price changes, not the average percentage change in costs.
- Be alert to simultaneous surprises in the headline PMI, employment and new orders components.
Educational guidance only — never a trading signal or recommendation.
Related indicators
ISM Manufacturing PMI
A monthly survey of U.S. manufacturing purchasing managers that indicates whether factory activity is expanding or contracting.
ISM Manufacturing Employment Index
A monthly diffusion index within the ISM Manufacturing PMI report that tracks whether U.S. manufacturers are reporting improving or worsening employment conditions.