Global| Jul 31 2008Chicago Purchasing Managers' Barometer Improved Again, Prices Surged
by:Tom Moeller
|in:Economy in Brief
Summary
The Chicago Purchasing Manager's Association reported that its July business barometer improved again. The figure of 50.8, versus 49.6 in June, was the first reading above the break-even level of 50 since this past January. Consensus [...]
The Chicago Purchasing Manager's Association reported that its July business barometer improved again. The figure of 50.8, versus 49.6 in June, was the first reading above the break-even level of 50 since this past January. Consensus expectations had been for an unchanged reading of 49.0.
During the last ten years there has been a 67% correlation between the business barometer and the three-month change in US factory sector industrial production. There has been an 85% correlation between the Chicago figure and the national ISM index (due for release tomorrow) and that is the highest correlation of all the regional series with the national ISM index.
Most of the components of the overall index improved in July. By far the largest came from the inventory series which rose sharply. The employment index, however, slipped after sharp improvement in June.
The production and new orders components inched up m/m and remained above the recent lows.
The prices paid index surged to its highest level since early 1980. During the last ten years there has been a 48% correlation between the price index and the three-month change in the finished goods PPI.
House Prices and the Stance of Monetary Policy from the Federal Reserve Bank of St. Louis is available here.
| Chicago PMI | July | June | July '07 | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|
| Chicago PMI Business Barometer Index | 50.8 | 49.6 | 53.2 | 54.4 | 56.8 | 60.4 |
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.
More Economy in Brief
