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 July report for Chicago PMI came in at 51.5, a 4.3 point decrease from last month’s 55.8.
Here is an excerpt from the press release:
“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,” said Lorena Castellanos, senior economist at MNI Indicators.
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.
