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Economy in Brief

Chicago Business Barometer Nears This Year's High
by Tom Moeller  October 30, 2015

The Chicago Business Barometer rebounded to 56.2 in October following its sharp September decline to 48.7. This is the highest reading since January. Expectations had been for 49.7 in the Action Economics Forecast Survey. The improvement contrasts with weaker readings in other major metropolitan areas. Haver Analytics calculates an index, based on the Chicago index, that is comparable to the ISM figure to be released Monday. It jumped to 56.9, the highest level this year. During the last ten years, there has been a 62% correlation between the Chicago index and the q/q change in real GDP.

Notable improvement was realized in the production and new orders components. Inventories also showed a sharp gain but each of the other component series fell. The employment series eased just moderately. During the last ten years, there has been an 86% correlation between the employment index and the m/m change in factory sector payrolls.

The prices paid index improved modestly but remained below the beak-even level of 50 for the third straight month. An improved 13% (NSA) of respondents reported paying higher prices while 30% 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 with 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) Oct Sep Aug Oct '14 2014 2013 2012
ISM-Adjusted General Business Barometer 56.9 50.1 55.7 63.3 59.4 54.3 54.8
General Business Barometer 56.2 48.7 54.4 64.5 60.7 56.1 54.6
  Production 63.4 43.6 59.0 67.8 64.5 58.3 57.6
  New Orders 59.4 49.5 56.7 69.2 63.8 59.2 55.1
  Order Backlogs 45.5 46.5 46.2 54.3 54.2 48.9 48.0
  Inventories 60.5 52.9 61.3 61.1 56.0 45.7 51.4
  Employment 50.6 52.3 49.1 58.9 56.0 55.6 55.3
  Supplier Deliveries 50.8 52.4 52.6 59.7 56.5 52.5 54.8
  Prices Paid 44.3 41.5 47.3 60.7 61.0 59.9 62.2
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