Chicago PMI Dips, Led by Weaker Employment Data

The Chicago Federal Reserve’s report on Midwest manufacturing this week showed some improvement, and now have only a very small conflicting report showing some mixed data from the region responsible for so much of the U.S. auto and farming numbers.

The Chicago Purchasing Managers report came in at 53.7 in July. This compared to a reading of 54.0 in June, so it was only a very slight drop. The report also compares to a Bloomberg consensus estimate of 52.5 from a range of 49.0 to 54.3, so things did not drop nearly as much as most economists were expecting.

There was a slight uptick in the price paid at 54.7 in July versus 54.0 in June. The supplier deliveries component fell to 53.3 in July from 54.2 in June. The new orders component showed some improvement, and that is good for the future report: 52.9 in July versus 51.9 in June.

What was a huge disappointment was the report showing that the employment component fell sharply to 53.3 in July from 60.4 in June. That will not lend much great hope for a boost in nonfarm payrolls due on Friday.

JON C. OGG