Chicago PMI rose to 53.0, meeting expectations.
July’s reading was 52.3.
It’s the first back-to-back gain in two years.
The report was mixed, with a drop in employment to 54.9 from 56.6 but gains in new orders. Here’s Dan Greenhaus’ take:
Yes the Chi PMI employment pulled back slightly but there was a big jump in new orders to 57.2. Chi PMi has highest correl with natl ISM.
— Dan Greenhaus (@DanBTIG) August 30, 2013
The index has been pretty volatile of late but has shown a general decline since 2011 — here’s the chart (full release below):
The Chicago Business BarometerTM increased to 53.0 in August from 52.3 in July, led
by an increase in New Orders and a second monthly gain in Order Backlogs. Order
Backlogs, though, remained in contraction after a record plunge in June.
The August data showed a second month of stabilisation in the Barometer compared
with the erratic moves seen in the second quarter. This stability came, however, at
fragile levels leaving the Barometer within striking distance of the breakeven 50 level,
and below the average seen over the past 10 years of 55.9.
Production, Employment and Supplier Deliveries all fell between July and August,
although all remained above 50. Production was down for the third consecutive month
while Employment slowed for a second month in August.
Inventories continued to contract, but at a slower pace than in July and Prices Paid
rose for a fourth consecutive month.
Little change in Supplier lead times contrasted with significant lengthening in Buying
Policies for Production Materiel and Capital Equipment in August.
Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist at MNI
Indicators said, “A pick-up in New Orders helped push the Barometer slightly higher in
August, but activity still remains below trend.”