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Economy in Brief

U.S. Chicago Purchasing Managers Index Declines
by Tom Moeller  September 30, 2019

The Chicago Business Barometer weakened to 47.1 during September from 50.4 during August. It was the third reading in the last four months below the break-even point of 50. Expectations had been for 50.1 in the Action Economics Forecast Survey. The Chicago Purchasing Managers figures are diffusion indexes where readings above 50 indicate growth.

Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure fell to 46.2 from 48.7, the third consecutive month below 50. This Chicago index has a 68% correlation with the national ISM Manufacturing Index, which is scheduled for release tomorrow. During the last 15 years, the index has had a 60% correlation with q/q change in real GDP.

Movement in the component series was mixed this month with new orders, production, order backlogs and inventories moving lower, the latter falling sharply. The supplier delivery series rose, indicating somewhat slower rates of product delivery.

The employment index rose to 45.6 in September, remaining below break-even for the third straight month. The proportion of survey respondents reporting higher employment improved slightly to 13% following a sharp decline in August. The share with reduced employment rose to 24%. These share figures are not seasonally adjusted.

The prices paid index fell to 57.3 from 59.8, down from 79.8 twelve months earlier. The share of respondents paying higher prices fell to 21% from 54% last September, while those paying lower prices rose to 12%, up from two percent one year earlier.

The MNI Chicago Report is produced by MNI 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%. Summary data are contained in Haver's USECON database, with detail including the ISM-style index in the SURVEYS database. The Action Economics Forecast Survey is available in AS1REPNA.

Chicago Purchasing Managers Index (%, SA) Sep Aug Jul Sep '18 2018 2017 2016
General Business Barometer 47.1 50.4 44.4 61.5 62.4 60.7 53.0
ISM-Adjusted General Business Barometer 46.2 48.7 47.5 59.7 60.7 59.0 51.9
   Production 40.4 48.1 41.4 60.9 64.5 64.2 54.5
   New Orders 48.5 53.4 43.6 62.8 63.8 63.6 55.6
   Order Backlogs 46.8 51.3 43.5 61.8 58.0 55.2 47.1
   Inventories 41.7 47.9 54.0 59.7 55.3 54.9 47.2
   Employment 45.6 43.7 42.9 52.1 55.2 52.9 49.4
   Supplier Deliveries 54.8 50.3 55.6 63.0 64.8 59.4 52.8
   Prices Paid 57.3 59.8 56.1 79.8 74.0 64.1 53.2
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