·
The Chicago Purchasing Manager's Association reported that its July
business barometer improved again. The figure of 50.8, versus 49.6 in
June, was the first reading above the break-even level of 50 since this
past January. Consensus expectations had been for an unchanged reading
of 49.0.
· During the last ten years there has been a 67% correlation between the business barometer and the three-month change in US factory sector industrial production. There has been an 85% correlation between the Chicago figure and the national ISM index (due for release tomorrow) and that is the highest correlation of all the regional series with the national ISM index.
· Most of the components of the
overall index improved in July. By far the largest came from the
inventory series which rose sharply. The employment index, however,
slipped after sharp improvement in June.
· The production and new orders components inched up m/m and remained above the recent lows.
· The prices paid index surged to its highest level since early 1980. During the last ten years there has been a 48% correlation between the price index and the three-month change in the finished goods PPI.
· House Prices and the Stance of Monetary Policy from the Federal Reserve Bank of St. Louis is available here.