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Economy in Brief

MNI Chicago Index Jumps to Highest Level in Nearly Three Years
by Tom Moeller  October 31, 2013

Factory sector activity in the Midwest region heated up this month. The MNI Chicago Report business barometer for October jumped to 65.9, its highest level since March of 2011. Expectations in the Action Economics Forecast Survey were for 55.0. Haver Analytics constructs a seasonally adjusted, ISM adjusted index and it rose to 60.7, its highest level since November 2011. During the last ten years there has been an 67% correlation between the adjusted Chicago index the quarterly change in real GDP.

Improvement in the component series during October was broad-based, but new orders, production and unfilled orders each jumped. The employment series also rose to its highest level since June. 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 deteriorated as the prices paid index fell to its lowest level since May. 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.) Oct Sep Aug Oct'12 2012 2011 2010
ISM-Adjusted Business Barometer 60.7 54.0 52.2 51.2 54.8 61.3 59.0
Business Barometer 65.9 55.7 53.0 50.7 54.6 62.7 61.3
  New Orders 74.3 58.9 57.2 50.6 55.1 65.3 63.4
  Production 71.1 58.0 53.0 53.6 57.5 66.5 65.0
  Order Backlogs 61.0 46.7 46.5 45.6 48.0 55.5 54.5
  Deliveries 52.3 53.7 50.8 51.0 54.8 60.0 61.0
  Inventories 48.0 46.0 45.0 49.6 51.4 55.2 50.5
  Employment 57.7 53.2 54.9 51.1 55.3 59.4 55.2
  Prices Paid 56.7 57.1 65.2 60.8 62.2 72.4 65.3
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