Chicago PMI drops in October
The Chicago Business Barometer declined to 58.4 in October from 60.4 in September. The index stands at its lowest level since April.
The data is compiled on a seasonally adjusted basis. An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
IFR Markets predicted a 60.0 reading for the October index.
“The MNI Chicago Business Barometer continued to revert back towards trend-levels in October, cooling off after a hot and unsustainable run last year,” said Jamie Satchi, Economist at MNI Indicators. “Production continues to be restrained by issues between firms and their suppliers, reflected by Supplier Deliveries at a 14-year high, while the latest raft of tariffs on Chinese goods appears to be exacerbating uncertainty across firms,” he added.
Hiring activity intensified in October, with the employment indicator rising for the first time since July. Companies reported ongoing difficulties recruiting both skilled and unskilled workers, while others prioritized retention of their existing workforce.
The prices paid index, a gauge of input price pressures, remained locked in a historically elevated range. Some firms reported seeing higher unit prices on invoices for the first time, on the back of further import tariffs levied on China, while others said they expected shortages to push prices higher over the coming months.
This month’s special question asked firms whether they saw allocation issues affecting their operations in Q4. The results were fairly even, with 31.9% of respondents each saying "yes" or "maybe" and the remaining 36.2% saying "no."