U.S. Chicago Business Barometer Drops Sharply in February
by:Tom Moeller
|in:Economy in Brief
Summary
- Component weakness pronounced in production & new orders.
- Employment weakens significantly.
- Pricing power softens.
The ISM-Chicago Purchasing Managers Business Barometer declined to 56.3 during February from 65.2 in January. It was the lowest point since August 2020 and down from the May 2021 peak of 73.3. The Action Economics Forecast expected 63.5. An index above 50 suggests expanding business activity in the Chicago area. Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure fell to 56.9, its lowest point since November 2020.
Leading the index lower last month was the production as it fell to 55.4, its lowest since August 2020. The new orders reading also fell sharply to 53.0 as a little changed 36% of respondents (NSA) reported higher orders but a greatly increased 25% reported a decline. The employment index fell to 43.5 in February, down from the recent high of 56.4 in October. A lessened eleven percent (NSA) of respondents reported higher employment while a greatly increased 24% reported less. The supplier deliveries series weakened to 75.3 from 87.6 and was at the lowest level in twelve months. Fifty percent of respondents reported slower product delivery speeds while three reported quicker speeds. The orders backlog index was little changed at 61.8.
Working higher in February was the inventory index to 57.3, but it remained below the December high of 60.6.
The prices paid index fell to 86.5 in February, down from an October high of 94.1 and the lowest level since March of last year.
Figures for 2021 were revised. The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey is collected online each month from manufacturing and nonmanufacturing firms in the Chicago area. Summary data are contained in Haver's USECON database with detail including the ISM-style index in the SURVEYS 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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