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Economy in Brief

U.S. Chicago Business Barometer Recovers in October
by Tom Moeller  October 29, 2021

• Component gains are broad-based.

• Employment increases for second month.

• Prices paid strengthen.

The ISM-Chicago Purchasing Managers Business Barometer rebounded to 68.4 in October and reversed its September decline to 64.7. The Action Economics Forecast Survey expected a decline to 64.3. An index above 50 suggests growing business activity in the Chicago area. Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure rose to 63.7 in October from 61.3 in September.

The new orders index rose to 67.5 from 64.4 while order backlogs surged to 74.6 from 61.1. A steady 48% (NSA) reported increased backlogs while a greatly lessened seven percent reported a decline. The inventories index rose to 51.1, only the first month indicating inventory accumulation since March. Supplier delivery speeds slowed modestly as the index rose to 84.7 after declining to 81.2. Working the other way, the production index fell in October to 58.5 from 60.7 in September. The figure was down sharply from a high of 72.9 in April. A lessened 36% (NSA) of respondents reported a higher level of output and a reduced 15% reported a decline.

The employment index strengthened to 56.6 in October from 52.4 in September. This latest level was increased from 44.0 in June. An increased 27% (NSA) reported more hiring while a reduced 14% reported less.

The prices paid index rebounded this month to a record high of 94.3 in October after falling to 90.7 in September. Eighty-three percent (NSA) of respondents raised prices while none lowered them.

The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey is collected online each month from manufacturing and nonmanufacturing 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.

Chicago Purchasing Managers Index (%, SA) Oct Sep Aug Oct '20 2020 2019 2018
General Business Barometer 68.4 64.7 66.8 60.1 49.0 51.4 62.4
ISM-Adjusted General Business Barometer 63.7 61.3 63.7 56.4 49.6 51.5 60.8
   Production 58.5 60.7 61.0 61.0 47.9 51.3 64.6
   New Orders 67.5 64.4 67.8 63.8 47.1 52.0 63.8
   Order Backlogs 74.6 61.1 81.6 50.6 42.6 46.9 58.0
   Inventories 51.1 48.0 48.8 47.4 44.7 48.7 55.4
   Employment 56.6 52.4 48.3 43.2 41.8 49.6 55.2
   Supplier Deliveries 84.7 81.2 92.8 66.5 66.4 55.6 64.8
   Prices Paid 94.3 90.7 93.9 64.4 59.5 58.5 74.0
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