Haver Analytics
Haver Analytics
| Feb 29 2024

Chicago Business Barometer Falls Again in February

  • The headline index fell to 44.0, pointing to on-going decline in activity.
  • The employment and production subindexes declined 6.0 points.
  • Input prices continued to rise at a slow pace.

The MNI Chicago Business Barometer fell 2.0 points in February to 44.0, well below the critical 50 level that separates expansion from contraction. The Action Economics Forecast Survey had looked for the index to inch up to 47.6 in February.

Haver Analytics calculates an ISM-adjusted version of this index that gives equal weights to each of the five component subindexes. The headline index includes the same subindexes but with varying weights. This ISM-adjusted index also fell in February to 44.5 from 46.2 in January. This index has been pointing to anemic activity for quite a while, having been above the critical 50 level in only one month since August 2022.

Among the subindexes, employment and production were the weakest. Employment fell 6.0 points to 40.7 from 46.7 in January. Only 3% of respondents reported increases in employment versus 10% in January, while 27% reported lower employment versus 20% in January. Production fell 5.8 points to 42.9. Fourteen percent of respondents reported increases in production versus 18% in January, while 35% reported declines versus 25% in January. The new orders subindex edged up to 46.4 in February from 46.1 January. Inventories rose to 43.0 from 37.0. Supplier delivery times dropped to 49.7 from 52.3. Input prices continued to rise, with the index reaching 64.7 in February from 63.9 in January. Thirty-nine percent of respondents reported paying higher input prices, down slightly from 41% in January, while 10% reported paying lower prices, unchanged from last month.

The Chicago Business Barometer is considered to be a leading indicator of the U.S. economy. A reading above 50 indicates expansion while one below 50 suggests contraction. Summary data are contained in Haver’s USECON database with detail including the ISM-style index in the SURVEYS database. The expectations figure from the Action Economics Forecast Survey is in the AS1REPNA database.

  • Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.

    Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).

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