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posted on 31 August 2017

August 2017 Chicago Purchasing Managers Barometer Unchanged

The Chicago Business Barometer was unchanged at 58.9 in August. This survey came in at expectations.

Analyst Opinion of Chicago PMI

The results of this survey continue to agree with district Federal Reserve manufacturing surveys - and aligns with the overall trend of the ISM manufacturing survey.

From Bloomberg / Econoday, the market expected the index between 57.5 to 61.6 (consensus 58.6) versus the actual at 58.9. A number below 50 indicates contraction. Jamie Satchi, economist at MNI Indicators stated,

Following the sharp rise in the Barometer to a more than three-year high in June it isn't too surprising to see activity subsequently ease somewhat. However, overall, the trend remains firm, consistent with the growth story of the US. The disappointment comes from the employment indicator which once again contracted, the sixth time in the last 12 months, with fewer firms expecting an increase in hiring,

From ISM Chicago:

While marking the eighteenth consecutive above-50 reading, this month's unchanged result follows July's sharp decline that snapped a run of five straight monthly increases in sentiment. Apart from Employment, all other components of the Barometer were above their respective levels seen last August with all of them were above their January levels, pointing to robust confidence among US firms.

The stability in sentiment was the result of gains in production and demand being offset by losses in backlogs, employment and supplier deliveries. Both New Orders and Production increased slightly, following hefty falls last month. Firms also saw the level of backlogs fall in August. The Order Backlogs indicator fell for the second consecutive month following the 23-year high set in June. Suppliers took slightly less time to deliver key inputs, with the respective indicator down to hit 59.3, a four-month low.

Companies saw stock levels fall significantly in August. Some companies reported that they could not satisfy odd requests or huge orders in a timely fashion due to limited inventory. The Inventories indicator fell by 6.4 points to dive into contraction, hitting the lowest level since the start of the year.

z chicago pmi.png

The Chicago ISM is important as it is a window into the national ISM reports which will be issued shortly. When you compare the graph below of the ISM Manufacturing Index against the Chicago PMI (graph above) - there is a general correlation in trends, but not necessarily correlation in values.

source and read the full report: Chicago PMI

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