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Chicago Purchasing Managers Index edged up 0.6 point to 59.4 in January
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The Chicago Business Barometer stabilised in January following two consecutive monthly declines, with continued firm growth in orders and output driving employment to a 14-month high. The Chicago Business Barometer edged up 0.6 point to 59.4 in January from a revised 58.8 in December, following the publication of new seasonal factors earlier in the month.
Business activity was led by a modest advance in New Orders while Order Backlogs was the second largest contributor to the Barometer’s faster expansion. Production also increased between December and January following two consecutive falls.
The survey has signposted a significant improvement in the jobs market over the past year. The start of 2015 saw the Employment Indicator rise sharply on the month to the highest since November 2013 and well above the levels seen in January 2014. Of the five components that comprise the Barometer, Supplier Deliveries was the only one that fell.
Inflationary pressures have eased gently in the previous three months, but the January decline was stronger as plummeting crude oil prices finally made their mark. The fourth consecutive monthly decline left Prices Paid in contraction, and at the lowest level since July 2009 when the US was in the middle of the financial crisis. 2015 also saw a sharp downward move in stockbuilding to the lowest since July 2013. Inventories of finished goods plunged over 15 points into contraction following very strong growth over the second half of 2014.
Commenting on the Chicago Report, Philip Uglow, Chief Economist of MNI Indicators said, “This was a solid start to 2015 with current growth in orders and output consistent with ongoing strength in US GDP. Encouragingly, the January survey showed that strength we saw in the second half of 2014 is having a significantly positive impact on employment.“
”The sharp fall in input costs due to the lower oil price, evidenced by the lowest level of Prices Paid for more than five years, will have a positive impact on business activity as well as consumer spending.“
Posted: January 30, 2015 Friday 10:00 AM