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Economy in Brief
German PPI Rises at Nine-Month High Pace
The German PPI gained 0.2% in June on the heels of a 0.6% rise in May...
U.S. Leading Economic Indicators Improve
The Conference Board's Composite Index of Leading Economic Indicators increased 0.5% (5.8% y/y) during June...
Philadelphia Fed Factory Conditions Recover; Prices Surge
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rebounded to 25.7 during July...
U.S. Initial Unemployment Insurance Claims Hit Lowest Since 1969
Initial claims for unemployment insurance dropped to 207,000 during the week ended July 14...
Japan's Trade Deficit Swings Back to Surplus (Small Surplus)
Japan's early June trade results show a goods trade position having swung back to surplus in June from deficit in May...
by Tom Moeller January 31, 2007
The Chicago Purchasing Manager's Assn. reported that its January business barometer fell to 48.8. It was the first month the diffusion index of factory sector activity fell below the break even line of 50 since 2003.
During the last ten years there has been a 69% correlation between the index and the three month change in US factory sector industrial production.
Lower new orders and weaker employment accounted for much of the weakening while production was up.
The prices paid index dropped to to the lowest level since late 2003.During the last ten years there has been an 89% correlation between the level of the prices diffusion index and the three month change in the core PPI for intermediate good.
The latest statement from the Federal Reserve Board can be found here.
| Chicago PMI | January | December | Jan. '06 | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|
| Chicago PMI Business Barometer Index | 48.8 | 51.6 | 58.1 | 56.8 | 60.4 | 62.8 |
