Long Term Perspective

After a sluggish period in 2001 and 2002, prices of crude materials and intermediate goods (excluding food and energy prices) began to accelerate in 2003 and through mid-2006, reflecting improvement in manufacturing activity only to slow in late 2006 and early 2007, reflecting a moderation in U.S. economic growth. But strong worldwide demand has been nudging up inflation late in 2007.

Short Term Perspective

Excluding food and energy prices, the crude materials index and the intermediate index slowed notably over the second half of 2006 and early 2007 but rebounded in mid-2007. The rebound was due to stronger global economic growth for the most part and higher energy costs feeding into other goods.