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Economy in Brief

Chicago Purchasing Managers Index Declines
by Tom Moeller  January 31, 2018

The Chicago Purchasing Managers Business Barometer for January fell to 65.7 and reversed virtually all of its December gain. A decline to 64.3 had been expected in the Action Economics Forecast Survey. Purchasing Managers figures are diffusion indexes where readings above 50 indicate growth. Figures for the last two years were revised.

Based on these figures, Haver Analytics constructs an index that is comparable to the ISM Composite index. The figure increased slightly to 65.9 from 65.6. It was the highest figure since July 1988.  During the last ten years, there has been a 63% correlation between the index and the q/q change in real GDP.

The month-to-month fall in the total index reflected declines in production, new & unfilled orders and inventories. Working higher were the supplier delivery and employment measures.The jobs index rose to the highest level since March 2012. During the last ten years, there has been an 80% correlation between the employment index and the m/m change in factory sector payrolls.

The prices paid measure increased to 72.1, the highest level since September. Forty-eight percent of respondents reported paying higher prices while six 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 with the ISM methodology. Summary data are contained in Haver's USECON database, with detail, including the ISM-style index, in the SURVEYS database. The Consensus expectations figure is available in AS1REPNA.

Chicago Purchasing Managers Index (%, SA) Jan Dec Nov Jan '17 2017 2016 2015
General Business Barometer 65.7 67.8 65.6 51.2 60.8 53.1 50.3
ISM-Adjusted General Business Barometer 65.9 65.6 64.3 50.5 59.0 52.0 51.6
  Production 73.4 76.9 70.3 56.7 64.3 54.7 52.5
  New Orders 66.4 72.2 67.9 56.9 63.5 55.7 50.4
  Order Backlogs 55.1 59.6 58.2 46.0 55.2 47.2 44.4
  Inventories 63.5 63.9 59.1 44.2 54.9 47.2 52.1
  Employment 60.7 55.3 56.4 47.5 52.9 49.4 50.3
  Supplier Deliveries 65.3 59.6 68.0 55.4 59.4 52.8 52.5
  Prices Paid 72.1 67.2 68.9 61.2 64.0 53.2 46.8
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