U.S. Chicago Business Barometer Tumbles in November
by:Tom Moeller
|in:Economy in Brief
Summary
- New orders, production & supplier deliveries drop sharply.
- Employment & inventories rise.
- Prices paid index continues to weaken.
The ISM-Chicago Purchasing Managers Business Barometer declined to 37.2 in November after easing to 45.2 in October. An index level of 46.4 had been expected in the Action Economics Forecast Survey. The index stands well below the May 2021 high of 73.3. Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. It declined to 44.7 this month, the lowest level since June 2020.
The new orders measure declined to 30.7, the lowest level since June 2020 and down from 79.0 in May 2021. The production index weakened 35.9, the lowest level since June 2020 and roughly half the April 2021 high of 70.0. A greatly lessened 10% (NSA) of respondents reported higher production while a higher 38% reported a decline. The supplier delivery index weakened to 49.9 from 59.3 and remains down from 90.3 in August 2021. The order backlog measure weakened to 36.1 from 47.3, also nearly a two-year low.
To the upside, the employment index rose to 47.1, its highest level in three months. Sixteen percent of respondents reported higher employment while 19% reported fewer jobs. The inventories measure increased to 59.8 from 56.9. It was the highest level in three months but below the March 2022 high of 68.7.
Inflation pressures weakened in November. The prices paid index fell sharply to 66.2 from 74.8 in October. The reading stood far below its high of 94.1 in October 2021. A lessened 40% (NSA) of respondents reported higher prices paid while a steady 10% reported price declines.
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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