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Economy in Brief
U.S. Housing Affordability Declines Further in June
The NAR Fixed Rate Mortgage Housing Affordability Index fell 3.6% in June...
EMU Output Makes Solid Gain in June
The European Monetary Union posted a 0.7% increase for industrial output in June...
U.S. Producer Prices Fall During July; Core Increase Weakens
The Producer Price Index for Final Demand fell 0.5% during July...
U.S. Unemployment Claims Continue on an Uptrend
Initial claims for unemployment insurance filed in the week ended August 6 rose 14,000 to 262,000...
RICS Survey Points to More U.K. Housing Sector Weakness
The survey of housing market conditions in the U.K. continues to show strength in prices versus weakness...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Winnie Tapasanun June 30, 2022
• 56.0 in June vs. 60.3 in May; drops in all index components except employment.
• New orders contract for the first time in two years.
• Production falls back, albeit at expansion readings for 23 straight months.
• Following six successive contractions, employment expands for the first time since November.
• Prices paid continues to be at an elevated level.
The ISM-Chicago Purchasing Managers Business Barometer fell to 56.0 in June from 60.3 in May and 56.4 in April. The June reading, below the peak of 73.3 in May 2021 and 67.6 in June 2021, was the lowest level since August 2020. The Action Economics Forecast Survey expected 58.0 for June. Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure was at an expansion-level 57.8 in June, down modestly from 61.0 last month and 59.8 in June 2021.
The production index fell to a still-expansion-level 55.2 in June, down from 60.9 in May and 62.9 last June. The new orders index decreased to a contraction-level 49.9 this month from 59.7 in May and 67.0 last June, registering its first contraction since June 2020. Twenty-four percent of respondents (NSA) reported higher orders while an increased 24% reported a decline. The employment index was at 50.7 in June, its first expansion level since November, up from 46.1 last month and 44.1 last June but modestly down from October's recent high of 56.4. A steady 15% (NSA) of respondents reported higher employment while a lessened 12% reported less hiring. The supplier deliveries index dipped to 69.1, the lowest reading since November 2020, from 69.3. An increased 50% of respondents (NSA) reported slower product delivery speeds while 11% reported faster delivery speeds. The orders backlog index fell to 55.2, the lowest reading since November 2020, after rising to a seven-month-high 64.6. The inventories index was at 63.9 in June, modestly down from 69.1 in May but significantly up from a contraction-level 40.0 in June 2021.
The prices paid index fell to a still-elevated 79.6 in June after rising to a four-month-high 88.6 in May. It was below October's high of 94.1 and 91.1 in June 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. The Chicago Business Barometer is considered to be a leading indicator of the U.S. economy. An indicator reading above 50 indicates expansion while below 50 suggests contraction. Summary data are contained in Haver's USECON database with detail including the ISM-style index in the SURVEYS database. The expectations figure from the Action Economics Forecast Survey is in the AS1REPNA database.