Chicago PMI Growth Slows, But Still Strong

Growth slowed this month in the Chicago economy, to a still very strong composite index of 60.5 vs 64.3 in August. Details are not provided to the public but the general description cites slowing in production, backlog orders and new orders. Inventories spiked this month to a 41-year high which the report ties to strong demand and longer lead times. Raw material prices are also noteworthy, showing their highest rate of monthly increase since November 2012. Employment is described as steady and soft. Yet employment aside and despite slowing in many readings, this report nevertheless points to solid expansion for the economy.

The Chicago PMI in August jumped to extreme monthly expansion of 64.3 from slight monthly expansion in July at 52.6. The August reading was the highest since a 65.5 spike in May. Details of the report are released to paid subscribers only but a general rundown was published with production leading August's gain while the monthly gain in new orders was described as strong. The wild swings likely are due to a small sample for the survey.