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Economy in Brief

U.S. Chicago Business Barometer Falls Back in April
by Winnie Tapasanun  April 29, 2022

• 56.4 in April vs. 62.9 in March; widespread drops in index components.

• Production is at the lowest level since July 2020.

• Employment remains below 50, indicating contraction for five straight months.

• Prices paid continues to be at an elevated level.

The ISM-Chicago Purchasing Managers Business Barometer was at 56.4 in April, down from 62.9 in March but marginally up from 56.3 in February. The April reading was below the peak of 73.3 in May 2021 and 70.8 in April 2021. The Action Economics Forecast Survey expected 62.0 for April. An index above 50 suggests expanding 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 remained at an expansion-level 57.3 in April, down modestly from 63.4 last month and 63.9 in April 2021.

The production index decreased to 50.9 in April, the lowest level since July 2020, from 60.0 in March. The new orders index fell to 51.1 from 61.9 as twenty-nine percent of respondents (NSA) reported higher orders but an increased 17% reported a drop. The employment index declined to 45.5 in April from 48.1 last month, remaining below the 50 expansion-contraction dividing line for five consecutive months and also below the recent high of 56.4 in October. A lessened 14% (NSA) of respondents reported higher employment while an increased 21% reported less hiring. The supplier deliveries index declined to 74.5, the lowest reading since February 2021, from 78.3. Fifty-five percent of respondents (NSA) reported slower product delivery speeds while only 7% reported faster delivery speeds. The orders backlog index slipped to 63.4 from 64.3. The inventories index declined slightly to 64.6 from 68.7, but up significantly from 46.6 in April 2021.

The prices paid index rebounded to an elevated-level 86.1 in April from 85.7 in March. Nevertheless, it was below October's high of 94.1 and 88.5 in April 2021.

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.

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