·
The Chicago Purchasing Managers Business
Barometer held at 61.5 in December versus an unrevised 61.7 in November.
Consensus expectations had been for an easing to 60. For the year, the
reading of 60.6 was slightly below the 2004 level and consistent with
the moderate slowdown in factory sector production to 3.5% growth
through November and 4.8% during all of 2004.
· During the last ten years there has been a 63% correlation between the level of the Chicago Business Barometer and y/y growth in factory production.
· The new orders index surged at yearend and recovered about half the prior month's steep decline. The production index dipped slightly, offset by a modest gain in employment. During the last ten years there has been a 62% correlation between the level of the employment index and year to year growth in factory sector employment nationally.
· Pricing power eased in December but just moderately from the near-record high in November. During the last ten years there has been a 79% correlation between the prices index and the y/y change in the core PPI for intermediate goods.