Chicago PMI Falls in July

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. Values above 50.0 indicate expanding manufacturing activity.

The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, fell to 44.4 in July from 49.7 in June, which was below the Investing.com forecast of 50.6. Values above 50.0 indicate expanding manufacturing activity.

Here is an excerpt from the press release:

“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,” said Shaily Mittal, Senior Economist at MNI. [Source]

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 indices clearly follow one another with the ISM falling slightly lower on average. Note the ISM Manufacturing indicator is through the previous month.