Chicago Business Barometer Up in August
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 (NYSEARCA:XLI)activity.
The latest Chicago Purchasing Manager’s Index, or the Chicago Business Barometer, rose to 51.2 in August from 51.9 in July, which is in expansion territory. Values above 50.0 indicate expanding manufacturing activity.
Here is an excerpt from the press release:
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The Chicago Business BarometerTM, produced with MNI, slipped to 51.2 in August. This was the second straight reading above the 50-mark after having sat below it for a full year, as firms stated that business activity picked up further in August.
Among the five main indicators, Order Backlogs was the only category to show a monthly decline, while Supplier Deliveries recorded the largest gain. [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.