The market was expecting a value of 49.3 to 49.5 versus the reported value of 58.7. A number below 50 indicates contraction.
The Chicago Purchasing Managers reported May’s Chicago Business Barometer sprung 9.7 to 58.7, the highest since March 2012 and in sharp contrast to April’s 3-1/2 year low. All Business Activity measures surged in May, reversing weakness seen in most categories in March and April.
- ORDER BACKLOGS, SUPPLIER DELIVERIES, and EMPLOYMENT: all snapped out of contraction;
- PRODUCTION: vaulted out of contraction to strongest since March 2012;
- INVENTORIES: lowest in 3-1/2 years.
- CAPITAL EQUIPMENT and PRODUCTION MATERIAL: lead times shortened..
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