NAPM Manufacturing Index Falls; Factory Prices Skyrocket

The National Assn. of Purchasing Management (NAPM) monthly index, a closely watched barometer of U.S. manufacturing health, fell in March, while prices paid by factories continued to rise -- suggesting inflation and interest rates may rise further. The overall index fell to 55.8 in March from 56.9 in February (a reading higher than 50 signifies expansion), but the group's price index shot to 79.8 in March, its highest level since February 1995. Analysts had predicted higher oil prices would raise the price component of the index, but Norbert J. Ore, chairman of the NAPM survey committee, said that prices also are rising in commodity sectors that aren't directly affected by crude oil prices.