The May report from the Chicago purchasing managers is out, and it is off the charts on a better-than-expected report. While April's report was down at 49.0 and while Bloomberg had consensus at only about 50.0, the Chicago Purchasing Managers Index (PMI) clocked in at a whopping 58.7 for May. The range of economists was all the way down at 47.5 to 53.0, and this indicates that business has snapped back much faster than what any of the economists have modeled. Today's report also likely will act to bolster expectations for other regional purchasing manager reports and even national expectations from the Institute for Supply Management.
This is actually the Chicago Business Barometer, and it was the highest reading since March 2012. It also rapidly reverses April's low that had not been seen for more than three years. The group said, "All Business Activity measures surged in May, reversing weakness seen in most categories in March and April."
Inventories were said to be at the lowest level in about three and a half years. All components in backlogs, supplier deliveries and employment were shown to have soared out of contraction. Production did as well.
Investors often use the Midwest reports as the first of many regional reports to try to get a barometer for national manufacturing and services conditions. The reports do not always coincide regionally for the national level, but traders and investors frequently will use any numbers and data they can to draw certain conclusions.
The full ISM-Chicago Business Survey and the MNI Chicago Report is here.
Filed under: 24/7 Wall St. Wire, Economy