Research >> Economics
Chicago PMI stuck
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The Chicago Purchasing Managers reported the CHICAGO BUSINESS BAROMETER remained stuck for the 5th month in a narrow range of decreasing business activity:
BUSINESS ACTIVITY:
PRICES PAID index decline continued, but at a somewhat faster rate;
PRODUCTION and ORDER BACKLOG indexes continued to fall, at a slower rate;
EMPLOYMENT: unemployment accelerated;
BUYING POLICY: MRO lead-times lengthened, while CAPITAL EQUIPMENT dropped.
In the current cycle, the Chicago Business Barometer™ peaked in October 2004. After falling since then, the Barometer appears to be testing a low of 33. February’s reading of 34 may have solidified the January low. If the March index confirms January as the provisional low point, the Barometer may have marked the subsequent end of the recession. If this were an average recession, it would end four months after the low point in the Barometer, suggesting an end of the recession in May 2009. A more conservative rule would draw an analogy to the 1981-82 recession. Using that rule, the end of the recession is projected to be November 2009, 9 months after the minimum of the Barometer (currently January). Please note: we should paraphrase Paul Samuelson to the effect that leading indicators predicted 5 of the last 3 recoveries.
Posted: February 27, 2009 Friday 10:00 AM