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Economy in Brief

Chicago Purchasing Agents' Index Down
by Tom Moeller December 30, 2004

The Chicago Purchasing Managers Business Barometer fell for the second consecutive month in December to 61.2, the lowest level since August. Consensus expectations had been for a decline to 62.3.

During the last ten years there has been a 73% correlation between the level of the Chicago Business Barometer and the three month change in factory sector industrial output. That correlation has risen to 86% during the last five years.

The employment index reversed all of the gains of the prior four months and fell 11.7 points to 49.1, the first month below 50 since July. During the last twenty years there has been an 80% correlation between the level of this employment index and the three month change in factory sector employment. The new orders index also fell to the lowest level since August and during the last two months is off 14.9 points.

The index of prices paid eased moderately to 84.4. During the last ten years there has been an 88% correlation between the Chicago price index and the three month change in the "core" intermediate goods PPI.

Chicago Purchasing Managers Index, SA Dec Nov Dec '03 2004 2003 2002
Business Barometer 61.2 65.2 61.2 62.9 54.7 52.7
  New Orders 64.5 70.0 66.1 67.1 58.0 56.2
Prices Paid 84.4 89.8 57.3 80.1 55.8 56.9
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