The August Chicago Purchasing Managers Business Barometer reversed all of the prior month's sharp gain with a 14.3 point m/m drop to 49.2 that dropped the index to its lowest in over two years. Consensus expectations had been for just a slight decline 61.0.

During the last ten years there has been a 65% correlation between the level of Chicago PMI and the three month change in factory sector industrial production.

New orders cratered 23.1 points and the production index dropped 14.4 points. Employment fell a lesser 4.4 points to 51.7. During the last ten years there has been a 75% correlation between the level of the employment index and the three month change in factory sector employment.

The index of prices repeated the 1.6 rise in July and rose to its highest level since April. During the last ten years there has been an 86% correlation between the Chicago price index and the three month change in the "core" intermediate goods PPI.