The Chicago Business Barometer eased further to 44.4 in July from 49.7 last month, the second sub-50 reading in 30 months.
Analyst Opinion of Chicago PMI
The Fed manufacturing surveys were little changed or decreased further this month – and Chicago ISM and two other Fed Survey were in contraction.
Expectations this month from Econoday were 50.1 to 51.8 (consensus 50.7) with the actual at 44.4. A number below 50 indicates contraction.
Shaily Mittal, Senior Economist at MNI Indicators said:
Sentiment faded further with firms facing weakness across the board. Global risks, trade tensions, slowdown in demand and sombre growth expectations, all jeopardize business conditions. Firms are not panicking yet, but the latest report isn’t adding to the cheer. The above risks lend weight to a monetary easing approach by the Fed, albeit a gradual one.
Four of the five components were in contraction territory this month, with only Supplier Deliveries above 50. The weakness in the Barometer observed in Q2 continued into the current quarter, with the latest outturn making it the weakest start to Q3 since 2009. The Production indicator fell 22% on the month to hit a 10-year low. Demand remained muted, highlighted by the New Orders indicator that subsided further into contraction. Order Backlogs remained below 50 for the third consecutive month, although it rose slightly on June’s reading.
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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.
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source and read the full report: Chicago PMI
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