The Chicago Purchasing Manager's Association reported that its February business barometer dropped hard from January to a reading of 44.5, the lowest level since late 2001. The latest figure was quite a bit lower than Consensus expectations.

During the last ten years there has been a 66% correlation between the index and the three-month change in US factory sector industrial production. There has been an 85% correlation between the Chicago figure and the national ISM index (due for release on Monday) and that is the highest correlation of all the regional series with the Nat'l index.

The new orders component of the index did rise slightly m/m, but most other component series fell quite hard. The employment index fell to its lowest since 2002 while the production series fell that sharply as well.

The prices paid index backed off just a bit from the January level which was a recent high, but the level remained at its highest since May 2006.