Global| Jun 30 2017Chicago Purchasing Managers Index Improves Significantly
by:Tom Moeller
|in:Economy in Brief
Summary
The Chicago Purchasing Managers Business Barometer for June jumped to 65.7 following an increase to 59.4 in May. It was the highest index level since May 2014. The latest reading surpassed expectations for 58.0 in the Action Economics [...]
The Chicago Purchasing Managers Business Barometer for June jumped to 65.7 following an increase to 59.4 in May. It was the highest index level since May 2014. The latest reading surpassed expectations for 58.0 in the Action Economics Forecast Survey. Readings above 50 indicate growth, while those below 50 show declines in activity levels.
Haver Analytics constructs an ISM-Adjusted Index using the Chicago numbers, comparable to the overall ISM index to be released Monday. The Haver figure rose to 62.2, the highest level since April 2011. During the last ten years, there has been a 61% correlation between this adjusted Chicago Purchasing Managers index and real GDP growth.
Most of the component series improved this month, some were sharply improved. The new order index index jumped to the highest point since May 2024 and the order backlog series surged to the highest level since July 2004. The supplier delivery index rose to 62.8, indicating the slowest delivery speeds since October 2010.
To the downside was the employment index which eased slightly, but continued to register positive job growth. Twenty-seven percent (NSA) of respondents reported higher payroll levels while 13% reported lower employment. During the last ten years, there has been a 74% correlation between the employment index and the m/m change in nonfarm payrolls. Also falling was the inventory index to the lowest point since January.
The prices paid barometer held fairly steady at the lowest level since November. Thirty-three percent of respondents paid higher prices while 11 percent reported lower prices.
The MNI Chicago Report is produced by MNI/Deutsche Borse Group in partnership with ISM-Chicago. The survey covers a sample of over 200 purchasing professionals in the Chicago area with a monthly response rate of about 50%. The ISM-Adjusted headline index is calculated by Haver Analytics using these data to construct a figure with the ISM methodology. Summary data are contained in Haver's USECON database, with detail, including the ISM-style index, in the SURVEYS database. The Consensus expectations figure is available in AS1REPNA.
| Chicago Purchasing Managers Index (%, SA) | Jun | May | Apr | Jun '16 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| General Business Barometer | 65.7 | 59.4 | 58.3 | 55.5 | 53.1 | 50.3 | 60.7 |
| ISM-Adjusted General Business Barometer | 62.2 | 59.4 | 57.7 | 52.5 | 52.0 | 51.6 | 59.3 |
| Production | 67.7 | 63.2 | 59.5 | 55.2 | 54.7 | 52.5 | 64.5 |
| New Orders | 71.9 | 61.4 | 65.9 | 61.6 | 55.7 | 50.4 | 63.8 |
| Order Backlogs | 62.8 | 51.8 | 43.0 | 57.9 | 47.4 | 44.4 | 54.2 |
| Inventories | 51.9 | 55.5 | 53.3 | 49.5 | 47.2 | 52.1 | 55.9 |
| Employment | 56.6 | 57.1 | 53.8 | 45.6 | 49.4 | 50.3 | 56.0 |
| Supplier Deliveries | 62.8 | 59.6 | 56.0 | 50.6 | 52.8 | 52.5 | 56.5 |
| Prices Paid | 57.5 | 57.3 | 62.9 | 54.7 | 53.1 | 46.8 | 61.0 |
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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