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Economy in Brief

Chicago Business Barometer Posts Sharp Rebound
by Tom Moeller  January 29, 2016

The Chicago Purchasing Managers report indicated that its General Business Barometer surged to 55.6 in January from 42.9 in December, and more than made up the declines during the prior two months. The index level was the highest in twelve months. During the last ten years, there has been a 65% correlation between the index level and quarterly growth in real GDP. The ISM-Adjusted index increased to 52.4, a three-month high.

Most component increases were strong, led by the production series which rose to 62.5, the highest level in eleven months. New orders also surged to 58.8 and order backlogs jumped to 47.2. Also to the upside was employment which recovered most of December's decline. During the last ten years, there has been an 82% correlation between the index level and the m/m change in factory sector payrolls. Falling sharply was the inventory and supplier delivery indexes.

The prices paid component eased to 43.7. Not seasonally adjusted, seven percent of respondents reported higher prices while 19% reported them lower.

The MNI Chicago Report is produced by MNI/Deutsche Borse Group in partnership with ISM-Chicago. The survey covers a sample of over 200 purchasing managers in the Chicago area with a monthly response rate of about 50%. The ISM-Adjusted headline index is calculated by Haver Analytics using these data to construct a figure with the ISM methodology. The figures can be found in Haver's SURVEYS database. The Consensus expectations figure is available in AS1REPNA.

Chicago Purchasing Managers Index (%, SA) Jan Dec Nov Jan '15 2015 2014 2013
ISM-Adjusted General Business Barometer 52.4 46.8 48.7 55.3 51.6 59.3 54.2
General Business Barometer 55.6 42.9 47.7 59.0 50.3 60.7 56.0
  Production 62.5 46.6 50.5 63.7 52.5 64.5 58.2
  New Orders 58.8 38.6 44.5 61.8 50.4 63.8 59.1
  Order Backlogs 47.2 29.4 46.3 50.6 44.4 54.2 48.8
  Inventories 42.7 48.9 47.2 39.9 52.1 55.9 45.6
  Employment 48.9 46.4 49.8 56.3 50.3 56.0 55.6
  Supplier Deliveries 49.2 53.7 51.6 54.8 52.5 56.5 52.5
  Prices Paid 43.7 45.6 42.2 44.0 46.8 61.0 59.8
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