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September Chicago Purchasing Managers Index Drops

Written by

MikeMcD82

The Chicago Purchasing Managers Index unexpectedly fell back below 50 to 46.1 in September.  This was well below the Bloomberg consensus forecast of 52.0, and August’s reading of 50.0.  I warned in my US week ahead that this indicator had the potential of surprising to the downside due to seasonal effects, but a drop of this magnitude was due to more then seasonal adjustments, and indicates an unwelcomed slowdown in mid-west economic activity.

Looking at the components, new orders declined to 46.3 from 52.5 in August, production fell to 47.2 in September from 52.9 , employment essentially held steady at 38.8 September from 38.7, and prices paid increased to 51.3 from 50.0.  This weak reading may place some downward pressure on other manufacturing indicators, including the ISM.

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