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One-page: One-Piece of the Puzzle

One-page: One-Piece of the Puzzle

One-page: One-Piece of the Puzzle

While today’s headline CPI number is painfully high at 9.1%*. We want to point out this is a lagging indicator.

“The Consumer Price Index (CPI), which measures changes in the inflation rate, is another closely watched lagging indicator. Few events cause more economic ripple effects than price increases. Both the overall number and prices in key industries like fuel or medical costs are of interest.” Investopedia

Let us look at one of the pieces of data which we monitor, as it is an indicator of the future trend.

“The ISM manufacturing index is a composite index that gives equal weighting to new orders, production, employment, supplier deliveries, and inventories. Each factor is seasonally adjusted. The ISM Report on Business contains three separate purchasing managers indexes based on surveys.” Investopedia

“The ISM PMI index is considered to be a leading indicator. It helps foretell future spending and expenditures that contribute to economic expansion. The indicator tends to reflect changes before the economy does.” Forex Training Group

So, let’s look at the ISM Manufacturing Report on New Orders and the ISM Manufacturing Report on Inventories.

Please see the chart below, which is the ISM Manufacturing Report on New Orders (green line), and the ISM Manufacturing Report on Inventories (orange line). The new orders (the green line) have gone down, and (the orange -line) inventories have gone up. Inventories are building while new orders are going down, does this sound like an inflationary scenario or deflationary scenario? Well, it is not inflationary! A classic inflation example is, “too much money chasing too few goods”. What we are seeing here portends deflation.

Let us look at the bottom graph, which simply shows New Orders minus Inventory. On the bottom graph, the ratio is shown as either green which is a positive ratio, or red which is a negative ratio. You can see the red negative triangle. It is negative 6.80 or (-6.80). The last time we saw red was at the beginning of the pandemic in 2020. The time before that was back in 2012; more on this in our next One-page: Once-piece of the Puzzle. If the negative trend continues, no doubt we will have deflation.

Chart data source Bloomberg. Created by Jonathan V. Bever

DISCLOSURE:

*all items index before seasonal adjustment ended June 2022, U.S. Bureau of Labor Statistics. https://www.bls.gov/news.release/cpi.nr0.htm

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Fulcrum Wealth Advisors
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Suite #210
Bellevue, WA 98004

(877) 400-0260
info@fulcrumwa.com

Check the background of this investment professional on FINRA's BrokerCheck  →

Registered Representatives offering securities and advisory services through Cetera Advisor Networks LLC (doing insurance business in CA as CFGAN Insurance Agency LLC), member FINRA/SIPC, a broker/dealer and a Registered Investment Adviser.

Individuals affiliated with Cetera firms are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.

Fulcrum Wealth Advisors, LLC is a state of Washington Registered Investment Advisory firm at: 10940 NE 33rd Pl., Suite #210, Bellevue, Washington 98004 United States.

Cetera is under separate ownership from any other named entity. Investment advisory services and tax consulting services are offered through Fulcrum Wealth Advisors, LLC.

This site is published for residents of the United States only. Financial Advisors of Cetera Advisor Networks may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Advisor Networks site at: www.ceteraadvisornetworks.com

​Fulcrum Wealth Advisors, LLC is a registered investment adviser in the State of Washington & Texas. We may not transact business in states where we are not appropriately registered, excluded, or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.

All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.

© 2025 Fulcrum Wealth Advisors, LLC. All rights reserved.​

Website design: Radically Distinct

Fulcrum Wealth Advisors
10940 NE 33rd Pl.
Suite #210
Bellevue, WA 98004

(877) 400-0260
info@fulcrumwa.com

Check the background of this investment professional on FINRA's BrokerCheck  →

Registered Representatives offering securities and advisory services through Cetera Advisor Networks LLC (doing insurance business in CA as CFGAN Insurance Agency LLC), member FINRA/SIPC, a broker/dealer and a Registered Investment Adviser.

Individuals affiliated with Cetera firms are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.

Fulcrum Wealth Advisors, LLC is a state of Washington Registered Investment Advisory firm at: 10940 NE 33rd Pl., Suite #210, Bellevue, Washington 98004 United States.

Cetera is under separate ownership from any other named entity. Investment advisory services and tax consulting services are offered through Fulcrum Wealth Advisors, LLC.

This site is published for residents of the United States only. Financial Advisors of Cetera Advisor Networks may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Advisor Networks site at: www.ceteraadvisornetworks.com

​Fulcrum Wealth Advisors, LLC is a registered investment adviser in the State of Washington & Texas. We may not transact business in states where we are not appropriately registered, excluded, or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.

All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.

© 2025 Fulcrum Wealth Advisors, LLC. All rights reserved.​

Website design: Radically Distinct

Fulcrum Wealth Advisors
10940 NE 33rd Pl.
Suite #210
Bellevue, WA 98004

(877) 400-0260
info@fulcrumwa.com

Check the background of this investment professional on FINRA's BrokerCheck  →

Registered Representatives offering securities and advisory services through Cetera Advisor Networks LLC (doing insurance business in CA as CFGAN Insurance Agency LLC), member FINRA/SIPC, a broker/dealer and a Registered Investment Adviser.

Individuals affiliated with Cetera firms are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.

Fulcrum Wealth Advisors, LLC is a state of Washington Registered Investment Advisory firm at: 10940 NE 33rd Pl., Suite #210, Bellevue, Washington 98004 United States.

Cetera is under separate ownership from any other named entity. Investment advisory services and tax consulting services are offered through Fulcrum Wealth Advisors, LLC.

This site is published for residents of the United States only. Financial Advisors of Cetera Advisor Networks may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Advisor Networks site at: www.ceteraadvisornetworks.com

​Fulcrum Wealth Advisors, LLC is a registered investment adviser in the State of Washington & Texas. We may not transact business in states where we are not appropriately registered, excluded, or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.

All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.

© 2025 Fulcrum Wealth Advisors, LLC. All rights reserved.​

Website design: Radically Distinct