Global| Feb 28 2020U.S. Chicago Business Barometer Rebounds in February; Employment Declines
Summary
• Chicago PMI jumps to 49.0 in February, still below 50-growth mark. • ISM-Adjusted measure calculated by Haver Analytics rises above 50. • Employment index decreases to 44.5, near nine-year low. The Chicago Purchasing Managers [...]
• Chicago PMI jumps to 49.0 in February, still below 50-growth mark.
• ISM-Adjusted measure calculated by Haver Analytics rises above 50.
• Employment index decreases to 44.5, near nine-year low.
The Chicago Purchasing Managers Business Barometer rebounded to 49.0 in February, more than reversing January's decline to 42.9, which was the lowest level in five years. December's value was 48.2. A reading below the key 50-mark for a diffusion index suggests contracting activity in the Chicago area. The Action Economics Forecast Survey expected 45.8.
Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with similar methodology as the ISM Composite Index. This measure jumped to 50.8 from 44.9. December's reading was the lowest since the early part of the recovery in 2009. The Chicago ISM-Adjusted index has a 78% correlation with the national ISM Manufacturing Index, which is scheduled for release on Monday.
The key drivers of the rise above 50 for the ISM-adjusted measure were the gains in supplier deliveries and production indices to 61.3 to 51.0 respectively. All of the other production-related measures remained below 50, with the employment index actually decreasing to 44.5, near the nine-year low of 44.0 reached in July 2019. The proportion of survey respondents that indicated lower employment increased to 24% from 19%, though (this data is not-seasonally adjusted). The prices paid measure declined to 52.9.
The MNI Chicago Report is produced by MNI 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%. Summary data are contained in Haver's USECON database, with detail including the ISM-style index in the SURVEYS database. The Action Economics Forecast Survey is available in AS1REPNA.
| Chicago Purchasing Managers Index (%, SA) | Feb | Jan | Dec | Feb '19 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| General Business Barometer | 49.0 | 42.9 | 48.2 | 61.6 | 51.3 | 62.4 | 60.8 |
| ISM-Adjusted General Business Barometer | 50.8 | 44.9 | 48.6 | 58.2 | 51.4 | 60.8 | 59.0 |
| Production | 51.0 | 42.7 | 46.5 | 62.8 | 51.2 | 64.5 | 64.2 |
| New Orders | 49.1 | 41.5 | 47.6 | 64.6 | 52.0 | 63.8 | 63.4 |
| Order Backlogs | 38.2 | 34.6 | 44.8 | 60.5 | 46.9 | 58.0 | 55.2 |
| Inventories | 48.1 | 40.2 | 46.1 | 49.0 | 48.7 | 55.4 | 54.9 |
| Employment | 44.5 | 47.0 | 47.2 | 54.3 | 49.6 | 55.3 | 52.9 |
| Supplier Deliveries | 61.3 | 53.3 | 55.4 | 60.1 | 55.6 | 64.8 | 59.4 |
| Prices Paid | 52.9 | 56.1 | 58.1 | 68.3 | 58.5 | 73.9 | 64.0 |
Gerald D. Cohen
AuthorMore in Author Profile »Gerald Cohen provides strategic vision and leadership of the translational economic research and policy initiatives at the Kenan Institute of Private Enterprise.
He has worked in both the public and private sectors focusing on the intersection between financial markets and economic fundamentals. He was a Senior Economist at Haver Analytics from January 2019 to February 2021. During the Obama Administration Gerald was Deputy Assistant Secretary for Macroeconomic Analysis at the U.S. Department of Treasury where he helped formulate and evaluate the impact of policy proposals on the U.S. economy. Prior to Treasury, he co-managed a global macro fund at Ziff Brothers Investments.
Gerald holds a bachelor’s of science from the Massachusetts Institute of Technology and a Ph.D. in Economics from Harvard University and is a contributing author to 30-Second Money as well as a co-author of Political Cycles and the Macroeconomy.
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