Chicago PMI: Largest Drop Since 2008

The Institute for Supply Management - Chicago reported that its purchasing managers' index (PMI) reading for June fell to 51.6. That is down from a 14-month high of 58.7 in May, and well below economists' expectations for a reading of 55.

Order backlogs sank to the lowest level since September 2009 and weighed most heavily on the June reading. Supplier delivery times were quicker, and production and new orders both fell. Only employment posted an increase.

The chief economist at MNI Indicators, which conducts the survey for the ISM - Chicago, noted that "while these latest data point to some weakening between the first and second quarter, it is too early to say if this will continue." The sharp drop since May may be at least partly attributable to unseasonable weather, according to the ISM release.

Prices paid, which measures the cost of inputs to businesses, increased for the second month in a row. The measure fell in April, but the recent increases have pulled it back in line with earlier levels posted this year.

Filed under: Economy