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Economy in Brief

Chicago Purchasing Managers Index Backpedals
by Tom Moeller  November 30, 2017

The Chicago Purchasing Managers Business Barometer for November declined to 63.9 from 66.2 in October. It was at the lowest level in three months, yet up from 57.2 one year ago. A decline to 63.0 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 increased to 63.7 from 60.2 in October. During the last ten years, there has been a 63% correlation between the index and the q/q change in real GDP.

Following storm disruptions in October, month-to-month performance in the component series was mixed. The new orders index more than reversed its October increase and order backlogs fell sharply. To the upside were the production, inventories and supplier deliveries indexes.

The employment index recovered the prior month's decline with a rise to the highest level in six months. An increased 21% (NSA) of respondents indicated a rise in hiring while a sharply lessened 9% 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 notched higher after a sharp October decline. A lessened 38% (NSA) of respondents reported paying higher prices while a lower five 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) Nov Oct Sep Nov '16 2016 2015 2014
General Business Barometer 63.9 66.2 65.2 57.2 53.1 50.3 60.7
ISM-Adjusted General Business Barometer 63.7 60.2 61.3 55.9 52.0 51.6 59.3
  Production 70.1 69.5 63.3 58.0 54.7 52.5 64.5
  New Orders 63.2 69.9 67.5 62.9 55.7 50.4 63.8
  Order Backlogs 57.2 69.4 65.3 52.9 47.4 44.4 54.2
  Inventories 59.7 53.0 56.9 55.5 47.2 52.1 55.9
  Employment 57.1 46.7 56.0 49.7 49.4 50.3 56.0
  Supplier Deliveries 68.5 61.7 62.6 53.5 52.8 52.5 56.5
  Prices Paid 68.5 67.2 74.3 57.0 53.1 46.8 61.0
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