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Economy in Brief

Chicago Purchasing Managers Index Strengthens
by Tom Moeller  April 28, 2017

The Chicago Purchasing Managers Business Barometer Index for April increased to 58.3 from 57.7 in March. It was the highest level since January 2015. The latest reading exceeded expectations for 57.0 in the Action Economics Forecast Survey. Readings above 50 indicate growth, while those below 50 show declines in activity levels.

Haver Analytics constructs an ISM-Adjusted Index using the Chicago numbers, comparable to the overall ISM index to be released Monday. The Haver figure improved to 57.7, and remained at the highest level since December 2014. During the last ten years, there has been a 61% correlation between this adjusted Chicago Purchasing Managers index and real GDP growth.

The underlying series exhibited mixed behavior this month. The new orders series surged to the highest level in nearly three years, but production gave back its March increase. The order backlog and inventory series fell but supplier deliveries rose, showing the slowest rate of product delivery since last May.

The employment index rebounded following a sharp March decline. It represented only the second month of growing employment in two years. Twenty five percent (NSA) of respondents reported higher payroll levels. A greatly lessened 12% reported lower employment. During the last ten years, there has been a 74% correlation between the employment index and the m/m change in nonfarm payrolls.

The prices paid barometer declined to the lowest level in three months. A still firm 35% of respondents paid higher prices while eight percent reported lower prices, compared to 11% one year earlier.

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. Summary data are contained in Haver's USECON database, with detail, including the ISM-style index, in the SURVEYS database. The Consensus expectations figure is available in AS1REPNA.

Chicago Purchasing Managers Index (%, SA) Apr Mar Feb Apr '16 2016 2015 2014
General Business Barometer 58.3 57.7 57.4 50.7 53.1 50.3 60.7
ISM-Adjusted General Business Barometer 57.7 57.2 57.6 52.0 52.0 51.6 59.3
  Production 59.5 61.7 60.3 53.3 54.7 52.5 64.5
  New Orders 65.9 60.4 59.2 51.9 55.7 50.4 63.8
  Order Backlogs 43.0 49.6 49.0 38.6 47.4 44.4 54.2
  Inventories 53.3 60.5 58.4 49.1 47.2 52.1 55.9
  Employment 53.8 49.1 57.1 48.0 49.4 50.3 56.0
  Supplier Deliveries 56.0 54.4 52.8 57.6 52.8 52.5 56.5
  Prices Paid 62.9 64.7 68.6 55.2 53.1 46.8 61.0
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