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Economy in Brief

Chicago Business Barometer Weakens During November
by Tom Moeller  November 30, 2020

• Business activity index falls to three-month low.

• Production, orders and inventories decline.

• Pricing power strengthens.

The Chicago Purchasing Managers Business Barometer eased to 58.2 during November from October's 61.1. It was the lowest level since August, though it was substantially higher than the May low of 32.3. A reading above 50 suggests rising activity in the Chicago area.

Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with similar methodology to the ISM Composite Index. This measure slipped to 56.2 in November from 56.7 in October. It also was the lowest level in three months, but up from a low of 40.2 this past June.

Movement amongst the underlying series was mixed in November. The production measure fell to 60.8 from 62.1 but still was higher than the low of 23.7 three months ago. The new orders measure declined to 60.0 from 65.0, as a lessened 40% (NSA) of companies reported increases and a slightly higher 17% reported declines. The inventories index fell to 45.7, its lowest level in three months. Working the other way, the order backlog index rose to 51.4 and made up a piece of the October decline. The supplier delivery measure rose and showed the slowest delivery speeds in six months.

The employment index increased slightly to 44.0 and recovered a piece of its October decline. It remained up from its June low of 31.9. A strengthened 14% (NSA) of respondents reported more hiring, up from two percent in June. Job cutbacks, however, rose slightly m/m to 24% of respondents, reduced from 35% in June.

On the inflation front, the prices paid measure surged to 74.4 in November, up from 48.4 in April. It was the highest level since October 2018 as a strengthened 41% (NSA) reported higher prices. No respondents reported lower prices, greatly reduced from a high of 18% twelve months ago.

The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey is collected online each month from manufacturing and non-manufacturing firms in the Chicago area. Summary data are contained in Haver's USECON database with detail including the ISM-style index in the SURVEYS database.

U.S. Federal Debt Has Increased, but Appears Sustainable for Now from the Federal Reserve Bank of Kansas City can be found here.

Chicago Purchasing Managers Index (%, SA) Nov Oct Sep Nov '19 2019 2018 2017
General Business Barometer 58.2 61.1 62.4 46.7 51.3 62.4 60.8
ISM-Adjusted General Business Barometer 56.2 56.7 58.7 47.4 51.4 60.8 59.0
   Production 60.8 62.1 67.9 44.0 51.2 64.5 64.2
   New Orders 60.0 65.0 64.9 47.6 52.0 63.8 63.4
   Order Backlogs 51.4 50.5 52.9 45.6 46.9 58.0 55.2
   Inventories 45.7 47.7 47.8 44.0 48.7 55.4 54.9
   Employment 44.0 43.2 45.7 49.1 49.6 55.3 52.9
   Supplier Deliveries 70.3 65.3 67.4 52.4 55.6 64.8 59.4
   Prices Paid 74.4 64.6 64.7 53.8 58.5 73.9 64.0
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