It’s ugly in the Midwest.
The latest Chicago Purchasing Manager’s Index from the Institute of Supply Management plunged to 46.2, coming in way below expectations.
Economists had forecast that the index rose to 53 in May, according to Bloomberg.
The index rose to 52.3 in April from 46.3 in March. That beat the expectation for a reading of 50, the point separating contraction and expansion.
Last month’s reading showed an expansion in business activity in the Midwest for the first time in three months.
Now it’s back below 50.
Philip Uglow, chief economist of MNI Indicators, wrote in the release: “We had thought that the April bounce was consistent with a partial return to normal following the weather- and port-related slowdown in the first quarter.
“The latest data for May, however, suggest that this was a false dawn and that sluggish activity has carried through to the second quarter.”
A 13.8% fall in new orders led the plunge in May, the release said.
On Twitter, Pension Partners’ Charlie Bilello pointed out just how bad this reading was:
And here’s the latest full chart of the index: