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 May report for Chicago PMI came in at 49.3, a 1.1 point decrease from last month’s 50.4.
Here is an excerpt from the press release:
Chief Economist of MNI Indicators Philip Uglow said, “While expectations are that growth in the US economy will bounce back in Q2, the evidence from the MNI Chicago Report shows activity weakening from an already low level. Firms ran down stocks at the fastest pace for more than 6 years in May, and while a rebuilding over the coming months could support output, the underlying message appears to be that businesses are not confident about the outlook for growth.”
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.
