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Economy in Brief

Chicago Purchasing Managers Index Eases
by Tom Moeller  July 29, 2016

Chicago purchasing managers reported that their Business Barometer slipped to 55.8 this month following an unrevised jump during June to 56.8. The figure remained near the highest level since January 2015, and exceeded expectations for 54.0 in the Action Economics Forecast Survey.

Haver Analytics constructs an ISM-Adjusted Index using the Chicago numbers, comparable to the overall ISM index to be released Monday. Our figure increased to 54.2, the highest level since October. During the last ten years, there has been a 61% correlation between the adjusted Chicago Purchasing Managers index and real GDP growth.

The production series fell to 54.6 after a jump to 56.3, and the new orders index declined to 59.3 from a strong 63.2. The order backlog measure fell to 56.2 from 59.7. Working the other way, the inventory index increased to 52.0 from 50.0, and the supplier delivery series gained to 53.1, indicating slightly slower product delivery speeds. 

The employment figure rebounded to 52.2, its highest level since March. During the last ten years, there has been an 80% correlation between the employment figure and the m/m change in factory sector employment.

The prices paid reading eased to 55.1, but remained up sharply from the February low of 41.1. A lessened 20% (NSA) of respondents reported paying higher prices while a slightly higher 11% paid less.

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 professionals 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) Jul Jun May Jul '15 2015 2014 2013
General Business Barometer 55.8 56.8 49.3 53.7 50.3 60.7 56.0
ISM-Adjusted General Business Barometer 54.2 52.9 48.0 53.3 51.6 59.3 54.2
  Production 54.6 56.3 47.4 58.8 52.5 64.5 58.2
  New Orders 59.3 63.2 48.8 56.8 50.4 63.8 59.1
  Order Backlogs 56.2 59.7 47.7 47.0 44.4 54.2 48.8
  Inventories 52.0 50.0 37.9 53.7 52.1 55.9 45.6
  Employment 52.2 45.0 48.3 47.1 50.3 56.0 55.6
  Supplier Deliveries 53.1 50.0 57.8 50.0 52.5 56.5 52.5
  Prices Paid 55.1 55.7 56.5 52.4 46.8 61.0 59.8

 

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