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Economy in Brief

Chicago Purchasing Managers Index Surges
by Tom Moeller  August 29, 2014

Chicago purchasing managers indicated that their August index of General Business Conditions jumped to 64.3 this month and more-than-reversed an unrevised drop to 52.6 in July. It was the highest level in three months and exceeded expectations for 56.0 in the Action Economics Forecast Survey. Haver Analytics constructs an ISM-Adjusted Index, comparable to the overall index to be released Tuesday. The figure increased to 63.0, the highest level since April 2011. During the last ten years there has been a 66% correlation between the adjusted Chicago Purchasing Managers index and real GDP growth.

Movement in the component series was generally positive. The production component (74.7) surged to its highest level since 2004 while inventories (61.2) gained to the highest level since 2006. New orders (65.6) improved to the highest level in three months and order backlogs (58.3) mostly recovered two months of decline. The supplier delivery series (57.6) indicated the slowest product delivery speeds since March. Moving the other way, the employment component (55.9) reversed increases during the last two months.

The index of prices paid notched up to 60.2 but remained down versus the highs earlier this year Nineteen percent (NSA) of respondents reported paying higher prices while four 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.

Chicago Purchasing Managers Index (%, SA) Aug Jul Jun Aug'13 2013 2012 2011
ISM-Adjusted General Business Barometer 63.0 54.9 60.7 52.8 54.3 54.8 61.3
General Business Barometer 64.3 52.6 62.6 54.1 56.1 54.6 62.7
  Production 74.7 51.4 70.1 54.8 58.3 57.6 66.6
  New Orders 65.6 55.7 65.1 58.3 59.3 55.1 65.3
  Order Backlogs 58.3 45.2 55.4 47.8 49.0 48.0 55.5
  Inventories 61.2 54.3 57.0 44.0 45.7 51.4 55.2
  Employment 55.9 59.8 58.4 55.3 55.5 55.3 59.5
  Supplier Deliveries 57.6 53.1 52.8 51.4 52.5 54.9 60.0
  Prices Paid 60.2 59.0 65.9 64.1 59.9 62.2 72.4
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