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Economy in Brief

Chicago Purchasing Managers Index Improves Significantly
by Tom Moeller  June 30, 2017

The Chicago Purchasing Managers Business Barometer for June jumped to 65.7 following an increase to 59.4 in May. It was the highest index level since May 2014. The latest reading surpassed expectations for 58.0 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 rose to 62.2, the highest level since April 2011. During the last ten years, there has been a 61% correlation between this adjusted Chicago Purchasing Managers index and real GDP growth.

Most of the component series improved this month, some were sharply improved. The new order index index jumped to the highest point since May 2024 and the order backlog series surged to the highest level since July 2004. The supplier delivery index rose to 62.8, indicating the slowest delivery speeds since October 2010.

To the downside was the employment index which eased slightly, but continued to register positive job growth. Twenty-seven percent (NSA) of respondents reported higher payroll levels while 13% 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. Also falling was the inventory index to the lowest point since January.

The prices paid barometer held fairly steady at the lowest level since November. Thirty-three percent of respondents paid higher prices while 11 percent reported lower prices.

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) Jun May Apr Jun '16 2016 2015 2014
General Business Barometer 65.7 59.4 58.3 55.5 53.1 50.3 60.7
ISM-Adjusted General Business Barometer 62.2 59.4 57.7 52.5 52.0 51.6 59.3
  Production 67.7 63.2 59.5 55.2 54.7 52.5 64.5
  New Orders 71.9 61.4 65.9 61.6 55.7 50.4 63.8
  Order Backlogs 62.8 51.8 43.0 57.9 47.4 44.4 54.2
  Inventories 51.9 55.5 53.3 49.5 47.2 52.1 55.9
  Employment 56.6 57.1 53.8 45.6 49.4 50.3 56.0
  Supplier Deliveries 62.8 59.6 56.0 50.6 52.8 52.5 56.5
  Prices Paid 57.5 57.3 62.9 54.7 53.1 46.8 61.0
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