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Economy in Brief

Chicago Purchasing Managers Report Softer Economic Conditions
by Tom Moeller  March 31, 2014

Chicago Purchasing Managers indicated that their March index of General Business Conditions fell to 55.9 from an unrevised 59.8 in February. The figure was the lowest since August and missed expectations for 60.0, according to the Action Economics Forecast Survey. Haver Analytics constructs an ISM-Adjusted Index, comparable to the overall index to be released tomorrow. The figure fell to 54.6 from 58.5 in February, and was the lowest reading in six months. During the last ten years there has been a 66% correlation between the adjusted Chicago Purchasing Managers index and real GDP growth.

Component declines in the survey were led by a lower employment index, which dropped to a break-even 50.0. Also dragging down the total was an easier inventory figure of 44.0, which indicated the swiftest rate of decumulation since July. New orders (58.8) also fell to the lowest level since July and order backlogs (50.4) were at their lowest level in six months. Working the other way, production gained to 61.7, its highest level in four months. Supplier delivery speeds slowed modestly, producing a higher reading of 58.6.

The index of prices paid fell to its lowest level (55.7) since April. Twenty eight percent (NSA) of respondents reported paying higher prices while 4 percent paid less.

The MNI Chicago Report is produced by MNI/Deutsche Borse Group in partnership with ISM-Chicago. The survey covers a sample of over 200 purchasing professionals in the Chicago area with a monthly response rate of about 50%. The ISM-Adjusted headline index is calculated by Haver Analytics using these data to construct a figure using the ISM methodology. The figures can be found in Haver's SURVEYS database. The Consensus expectations figure is available in AS1REPNA.

What the Federal Reserve is Doing to Promote a Stronger Job Market is today's speech by Federal Reserve Chair Janet L. Yellen and it can be found here.

Chicago Purchasing Managers Index (%, SA) Mar Feb Jan Mar'13 2013 2012 2011
ISM-Adjusted General Business Conditions 54.6 58.5 56.6 52.2 54.3 54.8 61.3
General Business Conditions 55.9 59.8 59.6 51.7 56.1 54.6 62.7
  New Orders 58.8 63.6 64.6 52.6 59.3 55.1 65.3
  Production 61.7 59.6 61.0 53.9 58.3 57.6 66.6
  Order Backlogs 50.4 53.7 58.8 44.1 49.0 48.0 55.5
  Supplier Deliveries 58.6 57.4 56.3 57.6 52.5 54.9 60.0
  Inventories 44.0 52.8 52.1 42.0 45.7 51.4 55.2
  Employment 50.0 59.3 49.2 55.5 55.5 55.3 59.5
  Prices Paid 55.7 59.1 64.9 59.7 59.9 62.2 72.4
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