U.S. Chicago Business Barometer Strengthens in April
by:Tom Moeller
|in:Economy in Brief
Summary
- Index surges to eight-month high.
- Employment, production & new orders lead improvement.
- Prices paid index also increases moderately.
The ISM-Chicago Purchasing Managers Business Barometer rose to 48.6 during April from 43.8 in March, but remained below 50 (the break-even point for overall activity) for the eighth consecutive month. It has risen, however, from a low of 37.9 in November. The index peaked at 71.3 in May 2021. A reading of 43.5 had been expected in the Action Economics Forecast Survey.
Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure rose to 49.7 in April from 46.8 in March. Remaining below 50 for the eighth consecutive month, it still indicates a decline in business activity overall. The latest reading stands below a 64.4 high in October 2021.
The employment index strengthened to 51.2 from 42.7 in March. It stood at an eight-month high. An improved 15% (NSA) of firms reported higher payrolls and a greatly lessened 12% reported a decline. The production index surged to 47.9 from 41.0 and stood at a three-month high. The new orders reading of 45.7 was increased from 42.6 in March and up from a low of 31.0 in November. The supplier-delivery series rose to a still low 54.8.
The inventories index fell to 48.7 this month after surging to 58.5 in March. The order backlog index was little changed at 45.5 but still increased from a low of 35.5 in January. A lessened 27% of survey respondents reported higher backlogs while 33% reported lower.
Inflation pressures picked up in April as the prices paid index rose to a three-month high of 70.3 from 65.6 in March. The index remained, however, below the high of 94.6 in November 2021. Fifty-five percent (NSA) of respondents reported an increase in prices while nine percent reported lower prices compared to one percent during all of 2021.
The Chicago Business Barometer is considered to be a leading indicator of the U.S. economy. An indicator reading above 50 indicates expansion while 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.
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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