Chicago Fed Manufacturing Index Drops for August

Another day with another lower report on manufacturing trends … The Chicago Federal Reserve has released the Chicago Fed Manufacturing Index for the month of August showing that the index fell by 1.2%. The seasonally adjusted level was 94.1 against a par barometer of 100 for 2007.

This may act as a base though when you consider the internal figures. The report noted:

The Federal Reserve Board’s industrial production index for manufacturing decreased 0.7% in August. Regional output rose 10.1% in August from a year earlier, and national output increased 4.0%.

Revised data shows that the index was up by 1.5% in July. Here are some additional data points:

• Regional auto sector production declined 4.0%.
• Regional steel sector output decreased 0.5%.
• Regional resource sector output moved up 0.1%.
• Regional machinery sector production increased 0.1%.

Today’s data contrasts with what the August durable goods release showed with the worst reading since January 2009. The Chicago Fed said, “The Midwest’s automotive output was up 21.7% in August relative to its year-ago level, and national automotive output was up 11.4%.”

We would note that it is important to keep in mind that this is already the end of September and we have more recent data out. That being said, this just hurts that much more when you consider that it reinforces how slow things have been going into the QE3 period.

JON C. OGG