Economic Growth "Robust" In Chicago Fed PMI

Overall economic growth remains steady at robust levels among Chicago's sample where the PMI, at a slightly higher-than-expected 63.9 in November, has posted its third straight plus 60 score. This is the best streak for this index in 3-1/2 years.

New orders slowed this month but remain very strong while backlogs, after hitting a 43-year high in October, also eased but also remain strong. Delivery delays, tied to the hurricane season, have been clearing up in most reports but not this one where deliveries slowed the most in 13 years. This is symptom of overheating that is likely tied to holiday congestion in the supply chain and underscores the strength of demand. Inventories rose and input costs remain elevated, also consistent with supply chain constraints.

Employment has not been strong in this report due to the lack of available workers, another symptom of overheating also evident in yesterday's Beige Book. The regional reports have been strong all year with some, at times, running too hot. This survey tracks both the manufacturing and non-manufacturing sectors of the Chicago economy.

Recent History Of This Indicator:
No regional report has been stronger than the Chicago PMI which, at 66.2 and 65.2 in October and September, appears to be at risk of overheating. The one weakness in October was hiring which was down, not because of demand, but due to a lack of available labor to employ. For November, forecasters are calling for only limited slowing, to a still 60-plus consensus at 63.5.