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Economy in Brief
Philadelphia Fed Manufacturing Index Jumps in January
The Federal Reserve Bank of Philadelphia Factory Sector Business Conditions Index jumped to January to 26.5...
U.S. Initial Jobless Claims Ease, but Are Still High
Initial claims for unemployment insurance fell to 900,000 in the week ended January 16...
U.S. Home Builder Sentiment Slips in January
The Composite Housing Market Index from the NAHB-Wells Fargo declined 3.5% m/m (+10.7% y/y) in January...
Decline in Refinancing Drags Down U.S. Mortgage Applications
The MBA Mortgage Loan Applications Index fell 1.9% w/w (+56.2% y/y) in the weekend January 15...
Euro Area Inflation Persists in Negative Territory
Euro area inflation is negative on a year-over-year basis for five months in a row...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller June 30, 2020
• The rise is disappointing.
• Component increases are broad-based.
The Chicago Purchasing Managers Business Barometer improved to 36.6 during June from 32.3 in May. Despite the increase, the figure remained below its high of 66.5 in July 2018. A reading below 50 suggests contracting activity in the Chicago area. The Action Economics Forecast Survey expected a reading of 42.0.
Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with similar methodology to the ISM Composite Index. This measure eased to 40.2 in June, the lowest reading since July 2009. During the last dozen years, there has been a 59% correlation between the Chicago ISM-Adjusted index and q/q growth in real GDP.
The production, new orders and order backlogs series posted large m/m increases. A fairly steady 18% (NSA) of respondents reported higher orders and a greatly reduced 57% reported declines. These increases were accompanied by declines in inventories reading and in the supplier delivery index, suggesting quicker product delivery speeds.
The employment index declined to 31.9, the lowest level since June 2009. It remained down from a recent peak of 59.1 in January 2018. Just two percent of survey respondents reported a rise in hiring while 35% reported a decline.
The index of prices paid rose to 55.2 from 53.8, indicating a rise in pricing power. A steady 26% of respondents reported higher prices but a lessened 13% reported a decline.
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) | Jun | May | Apr | Jun '19 | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
General Business Barometer | 36.6 | 32.3 | 35.4 | 50.1 | 51.3 | 62.4 | 60.8 |
ISM-Adjusted General Business Barometer | 40.2 | 41.8 | 42.1 | 51.7 | 51.4 | 60.8 | 59.0 |
Production | 33.8 | 23.7 | 25.3 | 53.0 | 51.2 | 64.5 | 64.2 |
New Orders | 29.3 | 21.9 | 24.2 | 50.4 | 52.0 | 63.8 | 63.4 |
Order Backlogs | 31.9 | 26.9 | 37.3 | 42.3 | 46.9 | 58.0 | 55.2 |
Inventories | 39.4 | 52.3 | 48.2 | 53.3 | 48.7 | 55.4 | 54.9 |
Employment | 31.9 | 37.0 | 33.8 | 50.6 | 49.6 | 55.3 | 52.9 |
Supplier Deliveries | 66.7 | 74.3 | 78.9 | 51.4 | 55.6 | 64.8 | 59.4 |
Prices Paid | 55.2 | 53.8 | 48.4 | 57.7 | 58.5 | 73.9 | 64.0 |