Global| Jul 31 2020U.S. Chicago Business Barometer Surges in July
by:Tom Moeller
|in:Economy in Brief
Summary
• The gain surpasses expectations. • Component improvement is broad-based. The Chicago Purchasing Managers Business Barometer improved to 51.9 during July from 36.6 in June. It was the highest reading since May 2019, up from a low of [...]
• The gain surpasses expectations.
• Component improvement is broad-based.
The Chicago Purchasing Managers Business Barometer improved to 51.9 during July from 36.6 in June. It was the highest reading since May 2019, up from a low of 32.3 in May. A reading above 50 suggests rising activity in the Chicago area. The Action Economics Forecast Survey expected a reading of 44.0.
Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with similar methodology to the ISM Composite Index. This measure strengthened to 50.1 in July, the highest level since February. During the last dozen years, there has been a 51% correlation between the Chicago ISM-Adjusted index and q/q growth in real GDP.
The production, new orders and order backlogs series increased sharply. An improved 38% (NSA) of respondents reported higher orders and a greatly reduced 33% reported declines. These figures were accompanied by a rise in the inventories reading. The supplier delivery index eased indicating quicker product delivery speeds, and it remained well below its April high.
The employment index rose 40.1 its highest level in four months. It remained down from a recent peak of 59.1 in January 2018. Nine percent of survey respondents reported a rise in hiring while 27% reported a decline.
The index of prices paid rose to 56.9 from 55.2, indicating a rise in pricing power. A slightly lessened 23% of respondents reported higher prices but a greatly lessened 9% 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) | Jul | Jun | May | Jul '19 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| General Business Barometer | 51.9 | 36.6 | 32.3 | 46.5 | 51.3 | 62.4 | 60.8 |
| ISM-Adjusted General Business Barometer | 50.1 | 40.2 | 41.8 | 47.9 | 51.4 | 60.8 | 59.0 |
| Production | 50.6 | 33.8 | 23.7 | 42.5 | 51.2 | 64.5 | 64.2 |
| New Orders | 53.1 | 29.3 | 21.9 | 46.3 | 52.0 | 63.8 | 63.4 |
| Order Backlogs | 47.2 | 31.9 | 26.9 | 44.0 | 46.9 | 58.0 | 55.2 |
| Inventories | 46.3 | 39.4 | 52.3 | 51.9 | 48.7 | 55.4 | 54.9 |
| Employment | 40.1 | 31.9 | 37.0 | 44.0 | 49.6 | 55.3 | 52.9 |
| Supplier Deliveries | 60.3 | 66.7 | 74.3 | 54.8 | 55.6 | 64.8 | 59.4 |
| Prices Paid | 56.9 | 55.2 | 53.8 | 56.0 | 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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