Purchasing index rises, but still indicates a contraction

A business news professional once remarked, "I don't care what an analyst says, just as long as it makes sense." Well, economists at the National Association of Purchasing Management-Chicago are making sense, but unfortunately it's not good news for the U.S. economy.

The NAPM-Chicago announced Friday that its business index, which measures manufacturing and non-manufacturing activity in the Chicago region, rose to just slightly this month, to 34.2 from 33.3 in January. A Bloomberg News survey had expected the index to fall to 33 in February. Readings above 50 indicate expansion; below 50, contraction. Hence, the index remains well below expansion levels -- which is bearish for U.S. stock markets.