Global| Sep 30 2019U.S. Chicago Purchasing Managers Index Declines
by:Tom Moeller
|in:Economy in Brief
Summary
The Chicago Business Barometer weakened to 47.1 during September from 50.4 during August. It was the third reading in the last four months below the break-even point of 50. Expectations had been for 50.1 in the Action Economics [...]
The Chicago Business Barometer weakened to 47.1 during September from 50.4 during August. It was the third reading in the last four months below the break-even point of 50. Expectations had been for 50.1 in the Action Economics Forecast Survey. The Chicago Purchasing Managers figures are diffusion indexes where readings above 50 indicate growth.
Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure fell to 46.2 from 48.7, the third consecutive month below 50. This Chicago index has a 68% correlation with the national ISM Manufacturing Index, which is scheduled for release tomorrow. During the last 15 years, the index has had a 60% correlation with q/q change in real GDP.
Movement in the component series was mixed this month with new orders, production, order backlogs and inventories moving lower, the latter falling sharply. The supplier delivery series rose, indicating somewhat slower rates of product delivery.
The employment index rose to 45.6 in September, remaining below break-even for the third straight month. The proportion of survey respondents reporting higher employment improved slightly to 13% following a sharp decline in August. The share with reduced employment rose to 24%. These share figures are not seasonally adjusted.
The prices paid index fell to 57.3 from 59.8, down from 79.8 twelve months earlier. The share of respondents paying higher prices fell to 21% from 54% last September, while those paying lower prices rose to 12%, up from two percent one year earlier.
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) | Sep | Aug | Jul | Sep '18 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| General Business Barometer | 47.1 | 50.4 | 44.4 | 61.5 | 62.4 | 60.7 | 53.0 |
| ISM-Adjusted General Business Barometer | 46.2 | 48.7 | 47.5 | 59.7 | 60.7 | 59.0 | 51.9 |
| Production | 40.4 | 48.1 | 41.4 | 60.9 | 64.5 | 64.2 | 54.5 |
| New Orders | 48.5 | 53.4 | 43.6 | 62.8 | 63.8 | 63.6 | 55.6 |
| Order Backlogs | 46.8 | 51.3 | 43.5 | 61.8 | 58.0 | 55.2 | 47.1 |
| Inventories | 41.7 | 47.9 | 54.0 | 59.7 | 55.3 | 54.9 | 47.2 |
| Employment | 45.6 | 43.7 | 42.9 | 52.1 | 55.2 | 52.9 | 49.4 |
| Supplier Deliveries | 54.8 | 50.3 | 55.6 | 63.0 | 64.8 | 59.4 | 52.8 |
| Prices Paid | 57.3 | 59.8 | 56.1 | 79.8 | 74.0 | 64.1 | 53.2 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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