Chicago PMI Sees 6.5 Year High In October

The Chicago Business Barometer, also known as the Chicago Purchasing Manager’s Index, is similar to the national ISM Manufacturing indicator but at a regional level and is seen by many as an indicator of the larger US economy. It is a composite diffusion indicator, made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys. Values above 50.0 indicate expanding manufacturing activity.

The latest report for Chicago PMI came in at 66.2, up from 65.2 last month and its highest since March 2011. Investing.com forecast 61.0.

Here is an excerpt from the press release:

“Firms kicked off Q4 in buoyant mood with only 12% expecting activity to decline between now and the close of the year. Despite the MNI Chicago Business Barometer hitting a six-anda-half year high, and output and demand in seemingly rude health, concerns remain over firms’ inability to attract and retain skilled workers.” said Jamie Satchi, Economist at MNI Indicators. [Source]

Let’s take a look at the Chicago PMI since its inception.

Here’s a closer look at the indicator since 2000.

Let’s compare the Chicago PMI with the more popular national ISM Manufacturing Index. Both indices clearly follow one another with the ISM falling slightly lower on average. Note the ISM Manufacturing indicator is through the previous month.