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Economy in Brief
U.S. Index of Leading Indicators Fell Again in July
The Conference Board's Composite Leading Economic Indicators Index fell 0.4% m/m...
U.S. Philly Fed General Activity Index Back to Positive Reading in August
The current general activity diffusion index rose nearly 19 points in August to 6.2...
U.S. Unemployment Claims Slightly Lower
Initial claims for unemployment insurance went down 2,000 in the week ended August 13 to 250,000...
Inflation Rages in EMU and Hovers Globally
Inflation in the European Monetary Union in July finalizes at 8.8% year-over-year...
U.S. Retail Sales Hold Steady in July; Nonauto Sales Rise
Total retail sales remained unchanged during July (10.3% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Carol Stone November 30, 2005
The Chicago Purchasing Managers Business Barometer was 61.7 for November, down slightly from October's 62.7, but firmer than forecasts of about 60.0. This was the third straight reading above 60, a favorable performance after about six months of saw tooth behavior.
The new orders index, however, kept up the seesaw pattern, as it fell back 11.0 points to 61.6 after October's 9.2-point increase; the October advance, notably, was corroborated in yesterday's report of a 3.4% surge in the value of national durable goods orders in October. The Chicago production index eased 4.5 points, partially reversing its October gain. Employment fell by a point to 50.3, indicating a marginal expansion of factory jobs in the Chicago region.
While the components describing real manufacturing activity portray a fairly optimistic picture, the index of prices paid may cause some worry. It rose once again, reaching 94.1, the highest since August 1979, when inflation in general was pretty rapid. This comparison, however, calls our attention to an important distinction in the Chicago and other Purchasing Manager surveys: these surveys count the number of firms reporting moves in a specific direction, not the magnitude of the move. Thus, many firms paid higher prices and fewer firms paid lower prices, but we have no idea how much those prices changed. Also note that the run-up in the overall index in fact resulted partially from a reduction in the number of firms paying lower prices, from 6% to 3%; as recently as August, this deflationary factor was 11% and 16% in May. The number of firms paying higher prices represents 67% of the total, a high figure, but not so dramatic as in earlier inflation periods and not even as high as several readings last year in the mid-70s.
Chicago Purchasing Managers Index, SA | Nov | Oct | Oct '04 | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Business Barometer | 61.7 | 62.9 | 67.7 | 62.9 | 54.6 | 52.8 |
New Orders | 61.6 | 72.6 | 79.7 | 67.0 | 58.0 | 56.2 |
Prices Paid | 94.1 | 79.6 | 84.7 | 80.1 | 55.8 | 56.9 |