An unusually strong rate of growth eased a bit as expected for the
Chicago PMI in August, to 63.6 vs July's 65.5 which was the strongest
showing since early in the year.
But growth in new orders did
continue to accelerate, at least slightly in August, though the build in
backlogs slowed. Improvement in delivery times is also a plus in the
August report which helped Chicago's sample to build inventories in the
month. Hiring slowed as did pressures on input costs which nevertheless
are near 11-year highs and which many respondents are blaming on trade
disputes. In a special question, 60 percent of the sample reports
passing higher costs to their customers.
This year's strength of
the Chicago PMI is hard to overstate and makes monthly comparisons
difficult, but the month's slowing is consistent with similar results
seen in some of the other small-sample surveys and hints perhaps at a
slower rate of growth for the August economy in general.
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