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Economy in Brief

Chicago Purchasing Managers Index Holds Steady
by Tom Moeller  August 31, 2017

The Chicago Purchasing Managers Business Barometer for August held at 58.9 following its unrevised sharp July fall. A decline in the index to 58.0 had been expected in the Action Economics Forecast Survey. The latest level remained near the lowest since April.

Based on these figures Haver Analytics constructs an index that is comparable to the ISM Composite index, to be released tomorrow. This figure fell to 55.7 from 58.0. It was the lowest level since January. During the last ten years, there has been a 62% correlation between the index and the q/q change in real GDP.

Changes in the component series were mixed. The production and new orders series both rose while the order backlog, inventory and supplier delivery series each fell.

The employment index also declined sharply to the first reading below the break-even level of 50 since March. During the last ten years, there has been an 81% correlation between the index level and the m/m change in factory sector payrolls.

The prices paid index eased following its July improvement. Twenty-five percent (NSA) of respondents reported paying higher prices while ten percent 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. 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) Aug Jul Jun Aug '16 2016 2015 2014
General Business Barometer 58.9 58.9 65.7 51.6 53.1 50.3 60.7
ISM-Adjusted General Business Barometer 55.7 58.0 62.2 52.0 52.0 51.6 59.3
  Production 61.9 60.8 67.7 52.0 54.7 52.5 64.5
  New Orders 61.2 60.3 71.9 54.3 55.7 50.4 63.8
  Order Backlogs 54.7 57.9 62.8 41.5 47.4 44.4 54.2
  Inventories 48.5 54.9 51.9 48.1 47.2 52.1 55.9
  Employment 47.5 52.6 56.6 52.6 49.4 50.3 56.0
  Supplier Deliveries 59.3 61.5 62.8 52.8 52.8 52.5 56.5
  Prices Paid 58.9 60.9 57.5 54.4 53.1 46.8 61.0
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