Thought of the Day

US Sales Managers Price Index Soars to 2-Year High in October


 
23 October 2025
 
The Prices Index surged to 56.8 in October, a two-year high, signalling strong inflationary pressures in the US economy. The Headline Sales Managers Index (SMI) reached 51.0, reflecting modest expansion in business activity, supported by stable confidence, sales, and staffing levels. The significant jump in prices, likely driven by supply chain disruptions and global trade policies, overshadows these gains, posing risks to demand and economic stability. The SMI All Sector Data highlights a resilient but cautious economy navigating a challenging cost environment.

US Prices Charged Soar to Two-Year High in October 2025
Diffusion Index: 50 = ’no growth’
US Sales Managers Price Index Soars to 2-Year High in October
US Sales Managers Price Index Soars to 2-Year High in October


PRICES CHARGED: The Prices Charged Index climbed to 56.8, marking a two-year high and a notable increase from September’s 53.4. This sharp rise in inflationary pressure is the standout trend for October, likely fuelled by higher input costs and supply chain adjustments, possibly tied to new global trade policies such as tariffs. Businesses are passing these costs onto consumers at an accelerating rate, now at its highest since October 2023. This sustained elevation in prices raises concerns about potential demand erosion, particularly in trade-sensitive sectors, and could challenge cost management and market competitiveness if the trend continues.

BUSINESS CONFIDENCE: The Business Confidence Index recorded 51.4, indicating cautious optimism among sales managers about near-term business conditions. While sentiment remains positive, it is moderated by uncertainties in the global trade landscape.

MARKET GROWTH: The Market Growth Index dipped to 50.9, a three-month low, but remained above the 50 threshold. This reflects a cautious outlook on market expansion, with some sales managers noting hesitancy in client commitments amid economic uncertainties.

SALES GROWTH: The Sales Growth Index increased in October. Despite trade-related challenges, sales volumes show resilience, particularly in less trade-sensitive industries, though growth remains modest.

STAFFING LEVELS: The Staffing Levels Index rose to 50.5, crossing the growth threshold and indicating stabilisation in workforce trends. Selective hiring, particularly in retail ahead of the holiday season, reflects cautious workforce adjustments, with managers avoiding significant payroll expansion.

SUMMARY: The October SMI of 51.0 indicates modest economic growth, supported by stable confidence, sales, and staffing. However, the sharp increase in the Prices Charged Index to 56.8, a two-year high, dominates the survey results for October, highlighting intensifying inflationary pressures that could challenge stability. The data points to an economy maintaining steady progress but grappling with significant cost-related headwinds.

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