Research >> Economics
Chicago PMI Fell
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The Chicago Purchasing Managers reported the CHICAGO BUSINESS BAROMETER rate of decline stabilized as the May reading fell to equal the six month moving average.
BUSINESS ACTIVITY:
PRICES PAID index decline continued to signal broad deflation;
EMPLOYMENT weakened further;
NEW ORDERS and ORDER BACKLOG indexes contributed further softness;
BUYING POLICY: Lead-times continued mixed.
The May CHICAGO BUSINESS BAROMETER™ settled into the middle of it’s December through May range, after a short-lived surge in April. The May rating of 34.9, however, did not break through the March low of 31.4, leaving some basis for residual optimism. If this were an average recession, it would end four months after the low point in the Barometer. Based on the current reading, August 2009 would mark the end of the recession. Since this is not working out to be an average recession, a more conservative rule appropriately draws an analogy to the 1981-82 recession. Using such a rule, the end of this recession would be projected to be nine months after the lowest value of the CHICAGO BUSINESS BAROMETER. With March 2009 as our best current estimate of that minimum, the recession can be projected to end in December 2009.
Posted: May 29, 2009 Friday 10:00 AM