Chicago Business Barometer Falls in January
by:Sandy Batten
|in:Economy in Brief
Summary
- The headline index fell to 46.0, pointing to continued decline in activity.
- The production subindex plummeted by nearly 10 points.
- Employment remained below the critical 50 level.
- Input prices continued to rise though more slowly than in December.
The MNI Chicago Business Barometer fell 1.2 points in January to 46.0, well below the critical 50 level that separates expansion from contraction. The Action Economics Forecast Survey had looked for the index to have edged up to 48.0 in January from 47.2 in December.
Haver Analytics calculates an ISM-adjusted version of this index that gives equal weights to each of the five component subindexes. The headline index includes the same subindexes but with varying weights. This ISM-adjusted index also fell in January to 46.2 from 48.2 in December. This index has been pointing to anemic activity for quite a while, having been above the critical 50 level in only one month since September 2022.
Among the subindexes, production exhibited the most weakness, falling to 48.7 in January from 58.6 in December. 18% of respondents reported increases in production versus 24% in December while 25% reported declines versus 14% in December. The new orders subindex edged up to 46.1 from 44.6 in December. Inventories fell to 37.0, the lowest reading since July, from 40.1. Employment edged up to 46.7 from 46.2. Supplier delivery times lengthened to 52.3 from 51.3. Input prices continued to rise though more slowly than in December with the index falling to 63.9 from 68.0. 41% of respondents reported paying higher input prices, down slightly from 42% in December, while 10% reported paying lower prices, up from 7% in December.
The Chicago Business Barometer is considered to be a leading indicator of the U.S. economy. A reading above 50 indicates expansion while one below 50 suggests contraction. Summary data are contained in Haver’s USECON database with detail including the ISM-style index in the SURVEYS database. The expectations figure from the Action Economics Forecast Survey is in the AS1REPNA database.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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