The Chicago Business Barometer which recently has spent more time in contraction than expansion again declined but remans in expansion. This survey came in below expectations.
Analyst Opinion of Chicago PMI
The results of this survey pretty much mirror the district Federal Reserve surveys – all came with insignificant growth or insignificant contraction. This is the state of manufacturing right now in the USA. The surprise was that the Chicago PMI employment component came in strong – with ADP this morning reporting NO GROWTH in manufacturing.
From Bloomberg, the market expected the index between 53.0 to 56.3 (consensus 55.2) versus the actual at 51.5. A number below 50 indicates contraction. Lorena Castellanos, senior economist at MNI Indicators stated,
Economic activity slowed down into the summer, suggesting June’s momentum was only a temporary revival in activity. Overall, it wasn’t a rosy month, with Employment the only measure that gained traction. On a trend basis, though, the July-August growth rates paint a slightly better picture – albeit still weak – than that seen earlier in the year.
The MNI Chicago Business Barometer fell 4.3 points to 51.5 in August from 55.8 in July, led by a large setback in Order Backlogs and a deceleration in New Orders. Four of the five Barometer components fell between July and August. Only Employment increased, hitting a 16-month high. The latest fall left the Barometer, New Orders and Production running at the slowest pace since May, when they all slipped below 50.
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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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