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Economy in Brief

U.S. Chicago Business Barometer Rebounded in May
by Kathleen Stephansen, CBE  May 31, 2022

• The production index rose 10 points and the orders index increased 8.6 points.

• Employment still points to contraction in the number of employees.

• Price pressures intensified in May.

The ISM-Chicago Purchasing Managers Business Barometer was at 60.3 in May, up from 56.4 in April but below the peak of 73.3 reached in May 2021. The Action Economics Forecast Survey expected 57.0 for May. An index above 50 suggests expanding business activity in the Chicago area. Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure rose to 61.0 in May, up from 57.3 in April but below the 64.5 reading of May 2021.

The production index rebounded 10 points to 60.9 in May from 50.9 in April, signaling faster output growth despite supply-chain disruptions. The new orders index rose to 59.7 from 51.1 in April. An increased 39% of respondents (NSA) reported higher orders and 18% reported a drop. The employment index inched up to 46.1 in May from 45.5 in April, remaining below the 50 expansion-contraction dividing line for six consecutive months, suggesting continued challenges to recruit workers. The index had reached its recent high of 56.4 in October 2021. Fifteen percent (NSA) of respondents reported higher employment, while 22% reported less hiring. The supplier deliveries index declined to 69.3 from 74.5 in April, the lowest reading since November 2020. Forty-six percent of respondents (NSA) reported slower product delivery speeds, while only 2% reported faster delivery speeds. The orders backlog index rose to a seven-month high to 64.6 in May from to 63.4 in April. The inventories index rose to 69.1 from 64.6 in April.

The prices paid index rose to 88.6 in May from 86.1 in April. The high was reached in October with a price paid index of 94.1.

The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey is collected online each month from manufacturing and nonmanufacturing firms in the Chicago area. Summary data are contained in Haver's USECON database with detail including the ISM-style index in the SURVEYS database. The expectation figure is from the Action Economics Forecast Survey, which is in AS1REPNA.

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