Chicago PMI Shows Ongoing Volatility

Volatility is what to expect from the Chicago PMI which, at 48.7, is back in contraction in November after surging into solid expansion at 56.2 in October. Up and down and up and down is the pattern with prior readings at 48.7 in September (the same as November) and 54.4 in August.

New orders are down sharply and are back in contraction while backlog orders are in a 10th month of contraction. Production soared nearly 20 points in October but reversed most of the gain in November. Despite November's weakness, employment is up slightly. Prices paid is in contraction for a fourth straight month.

Though this report points to November weakness for the whole of the Chicago economy, the volatility of the report should limit its impact on the month's outlook.

Recent History Of This Indicator:
Volatility is the name of the game for the Chicago PMI which has been swinging back and forth from strength to contraction. The Econoday forecast calls for slowing in the November report, to 54.0 from October's outsized 56.2 when components for new orders and production posted 2015 bests. Production, in fact, surged nearly 20 points in October in a reminder of how volatile this series can be.