Global| Nov 30 2020Chicago Business Barometer Weakens During November
by:Tom Moeller
|in:Economy in Brief
Summary
• 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 [...]
• 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 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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