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Economy in Brief

MNI Chicago Index Shows Factory Sector Improvement
by Tom Moeller  September 30, 2013

The MNI Chicago Report business barometer improved this month to 55.7, its highest level since May. Expectations were for 54.0. Haver Analytics constructs a seasonally adjusted figure comparable to the MNI Barometer and it rose to 54.0, also its highest level since May. During the last ten years there has been an 66% correlation between the adjusted Chicago index the quarterly change in real GDP.

Improvement in the components during September was led by production, new orders and a slower pace of vendor deliveries. Working the other way, the employment index fell to its lowest level since April. During the last ten years there has been an 80% correlation between the employment index and the m/m change in factory sector payrolls.

Pricing power also deteriorated as the prices index reversed its increases of the prior two months. During the last ten years there has been a 67% correlation between the prices paid index and three-month growth in the intermediate goods PPI.

The survey panel consists of 200 manufacturing purchasing professionals in the Chicago area. The MNI figures are copyrighted by the MNI Chicago Report in partnership with the Institute for Supply Management-Chicago. The figures from the survey can be found in Haver's SURVEYS database. The Consensus expectations figure is available in AS1REPNA

MNI Chicago Report (Diff. Index, 50=No Chg.) Sep Aug Jul Sep'12 2012 2011 2010
ISM-Adjusted Business Barometer 54.0 52.2 50.6 52.5 54.8 61.3 59.0
Business Barometer 55.7 53.0 52.3 50.9 54.6 62.7 61.3
  New Orders 58.9 57.2 53.9 49.3 55.1 65.3 63.4
  Production 58.0 53.0 53.6 56.1 57.5 66.5 65.0
  Order Backlogs 46.7 46.5 42.9 44.2 48.0 55.5 54.5
  Deliveries 53.7 50.8 51.0 53.3 54.8 60.0 61.0
  Inventories 46.0 45.0 37.7 50.6 51.4 55.2 50.5
  Employment 53.2 54.9 56.6 53.1 55.3 59.4 55.2
  Prices Paid 57.1 65.2 63.6 63.6 62.2 72.4 65.3
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