Global| Jun 30 2020U.S. Chicago Business Barometer Increases in June
by:Tom Moeller
|in:Economy in Brief
Summary
• The rise is disappointing. • Component increases are broad-based. The Chicago Purchasing Managers Business Barometer improved to 36.6 during June from 32.3 in May. Despite the increase, the figure remained below its high of 66.5 in [...]
• The rise is disappointing.
• Component increases are broad-based.
The Chicago Purchasing Managers Business Barometer improved to 36.6 during June from 32.3 in May. Despite the increase, the figure remained below its high of 66.5 in July 2018. A reading below 50 suggests contracting activity in the Chicago area. The Action Economics Forecast Survey expected a reading of 42.0.
Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with similar methodology to the ISM Composite Index. This measure eased to 40.2 in June, the lowest reading since July 2009. During the last dozen years, there has been a 59% correlation between the Chicago ISM-Adjusted index and q/q growth in real GDP.
The production, new orders and order backlogs series posted large m/m increases. A fairly steady 18% (NSA) of respondents reported higher orders and a greatly reduced 57% reported declines. These increases were accompanied by declines in inventories reading and in the supplier delivery index, suggesting quicker product delivery speeds.
The employment index declined to 31.9, the lowest level since June 2009. It remained down from a recent peak of 59.1 in January 2018. Just two percent of survey respondents reported a rise in hiring while 35% reported a decline.
The index of prices paid rose to 55.2 from 53.8, indicating a rise in pricing power. A steady 26% of respondents reported higher prices but a lessened 13% reported a decline.
The MNI Chicago Report is produced by MNI 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%. Summary data are contained in Haver's USECON database, with detail including the ISM-style index in the SURVEYS database. The Action Economics Forecast Survey is available in AS1REPNA.
| Chicago Purchasing Managers Index (%, SA) | Jun | May | Apr | Jun '19 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| General Business Barometer | 36.6 | 32.3 | 35.4 | 50.1 | 51.3 | 62.4 | 60.8 |
| ISM-Adjusted General Business Barometer | 40.2 | 41.8 | 42.1 | 51.7 | 51.4 | 60.8 | 59.0 |
| Production | 33.8 | 23.7 | 25.3 | 53.0 | 51.2 | 64.5 | 64.2 |
| New Orders | 29.3 | 21.9 | 24.2 | 50.4 | 52.0 | 63.8 | 63.4 |
| Order Backlogs | 31.9 | 26.9 | 37.3 | 42.3 | 46.9 | 58.0 | 55.2 |
| Inventories | 39.4 | 52.3 | 48.2 | 53.3 | 48.7 | 55.4 | 54.9 |
| Employment | 31.9 | 37.0 | 33.8 | 50.6 | 49.6 | 55.3 | 52.9 |
| Supplier Deliveries | 66.7 | 74.3 | 78.9 | 51.4 | 55.6 | 64.8 | 59.4 |
| Prices Paid | 55.2 | 53.8 | 48.4 | 57.7 | 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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