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Economy in Brief

Chicago Purchasing Managers Index Improves
by Tom Moeller  October 31, 2017

The Chicago Purchasing Managers Business Barometer for October rose to 66.2 from 65.2 in September. It was the highest level since March 2011. A decline to 62.0 had been expected in the Action Economics Forecast Survey.

Based on these figures Haver Analytics constructs an index that is comparable to the ISM Composite index, to be released tomorrow. This figure declined to 60.2 from 61.3 in September. During the last ten years, there has been a 63% correlation between the index and the q/q change in real GDP.

Month-to-month performance in the component series was mixed. The production series strengthened to the highest level since 2014 while new orders also strengthened. The unfilled orders reading also rose sharply, partially due to storm disruptions. The inventories and supplier delivery indexes weakened.

The employment index fell back to the lowest level since January. A steady 20% (NSA) of respondents indicated an increase in hiring while a higher 24% reported a decline. 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 fell back from its 2011 high. A lessened 39% (NSA) of respondents reported paying higher prices while a higher nine 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) Oct Sep Aug Oct '16 2016 2015 2014
General Business Barometer 66.2 65.2 58.9 51.8 53.1 50.3 60.7
ISM-Adjusted General Business Barometer 60.2 61.3 55.7 51.3 52.0 51.6 59.3
  Production 69.5 63.3 61.9 54.7 54.7 52.5 64.5
  New Orders 69.9 67.5 61.2 53.4 55.7 50.4 63.8
  Order Backlogs 69.4 65.3 54.7 44.6 47.4 44.4 54.2
  Inventories 53.0 56.9 48.5 46.2 47.2 52.1 55.9
  Employment 46.7 56.0 47.5 50.7 49.4 50.3 56.0
  Supplier Deliveries 61.7 62.6 59.3 51.5 52.8 52.5 56.5
  Prices Paid 67.2 74.3 58.9 58.5 53.1 46.8 61.0
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