U.S. Chicago Business Barometer Declines in September
by:Tom Moeller
|in:Economy in Brief
Summary
- Index remains below expansion level.
- Production, new orders & employment indexes weaken.
- Prices paid index falls sharply.
The ISM-Chicago Purchasing Managers Business Barometer weakened in September to 44.1 from 48.7 in August. The index has been below the break-even point of 50 since September of last year. A reading of 47.0 had been expected in the Action Economics Forecast Survey. The index peaked at 71.3 in May 2021.
Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure declined to 45.1 in September from 50.1 in August. The latest reading remains below a 64.4 high in October 2021 but was above the low of 41.4 in July.
The production measure fell to 51.1 in September from 57.1 in August. It remained up from 36.6 in November. A lessened 26% (NSA) of survey respondents reported higher production while an increased 26% also reported a decline. The new orders measure plunged to 38.0 in September from 55.6 in August. A greatly lessened 14% of survey respondents reported more new orders while a higher 39% reported declines. The employment index weakened to 44.5 in September from 48.3 in August. Seven percent of respondents reported more hiring while 17% reported less.
Offsetting these declines, the order backlog index increased to 39.4 from 28.9. A steady 12% of survey respondents reported higher backlogs while a lessened 35% reported a decline. The inventory index of 44.2 in September compared to 44.0 in August. A fairly steady 24% of respondents reported higher inventories while 40% reported f ewer. The supplier delivery index rose to 47.9 this month from 45.3. It was the highest level in three months.
Inflation pressures weakened in September. The prices paid index fell to 59.5 after having risen to 74.0 in July. The index remained below the high of 94.6 in November 2021. ThIrty-five percent (NSA) of respondents reported an increase in prices, while 17% reported lower prices.
The Chicago Business Barometer is considered to be a leading indicator of the U.S. economy. An indicator reading above 50 indicates expansion while 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.
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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