Chicago PMI In Contraction Territory

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 49.7 in June from 54.2 in May, which was below the Investing.com forecast of 53.1. Values above 50.0 indicate expanding manufacturing activity.

Here is an excerpt from the press release:

“The Barometer entered contraction territory, having remained above 50 for over two years. With customers rethinking their purchases, demand tumbled, and consequently firms pulled back production, weakening overall business sentiment,” said Shaily Mittal, Senior Economist at MNI.

"In coming months, our survey will provide further evidence as to whether the diminished business confidence is temporary amid tariffs woes or more structural calling for some counter measures,” she added. [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.