Economy
Chicago PMI Drops Unexpectedly in September
Written by Sandy Williams
September 30, 2015
The Chicago Business Barometer, or Chicago PMI as it is more commonly known, surprised economists by dropping 5.7 points to 48.7 in September The decline follows two months of expansion and the speed of descent is a cause for concern said MNI Indicators.
The production index plummeted by double digits to its lowest level since July 2009 pushing the headline PMI into negative territory. New orders dropped significantly and manufacturer backlogs remained in contraction indicating business are working below capacity.
“While activity between Q2 and Q3 actually picked up, the scale of the downturn in September following the recent global financial fallout is concerning,” said MNI Indicators Chief Economist Philip Uglow. “Disinflationary pressures intensified and output was down very sharply. We await the October data to better judge whether this was a knee jerk reaction and there is a bounceback, or whether it represents a more fundamental slowdown.
Of the five components of the barometer, only supplier deliveries and employment remained in expansion in September. Supplier deliveries were unchanged from August. Employment levels rose for the third month in a row but MNI says most survey respondents reported no change in staffing levels.
Prices paid fell to their lowest level since July 2009, impacted by global pressure on crude oil and commodity prices.
The MNI Chicago Business Barometer, a closely watched leading indicator of U.S. economic activity, is published by MNI Indicators and is based on a survey panel of purchasing/supply chain professionals, primarily drawn from membership of the Institute for Supply Management-Chicago (ISM-Chicago). The Chicago Business Barometer is a composite diffusion indicator made up of the Production, New Orders, Order Backlogs, Employment and Supplier Deliveries indicators and is designed to predict future changes in gross domestic product (GDP). An indicator reading above 50 indicates expansion compared with a month earlier while below 50 indicates contraction.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
Architecture billings flat in October after months of contraction
Architecture firms reported stable billings in October, according to the latest Architecture Billings Index (ABI) released by the American Institute of Architects (AIA) and Deltek. This follows 20 months of contracting business conditions.
Trump taps Lutnick to be Commerce Secretary
President-elect Donald Trump has named Wall Street veteran Howard Lutnick as the new US Secretary of Commerce.
New York state manufacturing activity ramps up to multi-year high
New York state’s manufacturing sector saw substantial recovery in November, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.
CRU: Dollar and bond yields rise, metal prices fall as Trump wins election
Donald Trump has won the US presidential election. The Republican party has re-taken control of the Senate. Votes are still being counted in many tight congressional races. But based on results so far, the Republicans seem likely to maintain control of the House of Representatives. If confirmed, this will give Trump considerable scope to pass legislation pursuing his agenda. What this means for US policy is not immediately obvious. Trump will not be inaugurated until Jan. 20. In the coming weeks and months, he will begin to assemble his cabinet, which may give a clearer signal on his policy priorities and approaches. Based on statements he made during the presidential campaign, we have set out the likely direction of his economic policy here and green policy here.
ISM: Manufacturing index fell in Oct to lowest point of ’24
Domestic manufacturing contracted for the seventh straight month in October, according to the latest report from the Institute for Supply Management (ISM). This marks the 23rd time in the last 24 months that it has been in contraction.