Economy

Chicago PMI Disappoints in December

January 2, 2020

The Chicago Business Barometer remained in contraction with a reading below 50 in December, but rose 2.6 points to 48.9. An increase in production and supplier deliveries helped boost the PMI for the month, said MNI Indicators. The production PMI rose 4.9 points to 47.2 The index for supplier deliveries gained 5.1 points to register 55.4

The PMI rose less than expected, said Forex financial writer Chris Lewis. “It shows that the economy is still shrinking as far as purchasing is concerned by managers in large businesses. That being said, it is a mixed bag as it is better than anticipated but hardly bullish. Perhaps the best phrase to use for this announcement is ‘less bad than expected.’”

Manufacturing demand softened in December, declining to 49.2 from November’s new orders index of 49.4. Order backlogs were at a three-month high of 46.2, but fell to 41.4 for the quarter.

The inventory index remained in contraction for a fifth month, but gained 4.4 points to register 47.4.

Prices at the factory gate soared 9.2 percent to 58.4 and the highest level since August.

Business sentiment was at is lowest quarterly reading since the second quarter of 2009 at a reading of 46.2. The index remained in contraction for the second consecutive month.

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