Courtesy of Doug Short’s Advisor Perspectives.
The Chicago Business Barometer, also known as the Chicago Purchasing Manager’s Index, is similar to the national ISM Manufacturing indicator but at a regional level and is seen by many as an indicator of the larger US economy. It is a composite diffusion indicator, made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys.
The June report for Chicago PMI came in at 56.8, a 7.5 point increase from last month’s 49.3, it’s highest since January 2015.
Here is an excerpt from the press release:
Chief Economist of MNI Indicators Philip Uglow said, “June’s sharp increase in the MNI Chicago Business Barometer needs to be viewed in the context of the weakness seen in April and May. Looking at the three-month average provides a better guide this month to the underlying trend in the economy with activity broadly unchanged between Q1 and Q2. Still, on a trend basis activity over the past four months is running above the very low levels seen around the turn of the year.”
Let’s take a look at the Chicago PMI since its inception.
Here’s a closer look at the indicator since 2000.
Let’s compare the Chicago PMI with the more popular national ISM Manufacturing Index. Both indicies clearly follow one another with the ISM falling slightly lower on average. Note the ISM Manufacturing indicator is through the previous month.
