The Chicago Business Barometer moderated after last month’s decline.
Expections this month from Econoday were 59.0 to 64.0 (consensus 62.5) with the actual at 56.7. A number below 50 indicates contraction.
Jai Lakhani, Economist at MNI Indicators, said:
The MNI Chicago Business Barometer had a sluggish start to 2019, pressured by significant drops in both New Orders and Production, resulting in the lowest headline reading in two years. Encouragingly, some anecdotal evidence pointed to temporary factors such as holidays as the reason for dampening output as opposed to inherent weakness in demand
The MNI Chicago Business Barometer dropped to 56.7 in January, down 7.1 points from December’s downwardly adjusted 63.8. Four out of the five Barometer sub-components started the year lower. Notable falls in Production and New Orders contributed to most of the 7.1-point fall in the headline index. The decline marked the fifth time in two years the Barometer has fallen on a year-over-year basis. However, the Barometer continues to signal healthy business conditions, recording a 24th consecutive reading above 50. Contributing to the bulk of January’s downside was a drop in New Orders to a two year low. As a result of January’s weak order book strength, Production declined to a 10-month low. Firms noted an inability to absorb cost-push pressures as a reason for customers being deterred from placing orders in January.
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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