The last time we checked in on MNI’s Chicago PMI it was busy plunging – again.
Specifically, the gauge registered just 43.2 in October, representing a monumental drop from September’s 47.1 print, and a huge miss to consensus.
Fast forward a month, and the barometer bounced, but by less than expected. The November print on the business activity index was 46.3, in the middle of the range (44.4 to 50.1 from two-dozen surveyed economists). Although an improvement from October, it is the worst November print since the crisis and the second-worst in 17 years.
New orders, employment, inventories, production and order backlogs are all in contraction. Two components rose versus last month.
Market participants and commentators of an alarmist bent have zoomed in on the Chicago gauge over the past six or so months. When it plunged in July, it was the talk of the proverbial town for a couple of hours, before the Fed meeting took center stage.
The next day, Donald Trump reignited the trade war.
Partly as a result of that escalation, the US entered a manufacturing slump starting in August according to ISM. We’re now three months into the mini-factory recession, and folks are hoping for a bounce that validates the uptick on IHS Markit’s manufacturing PMI, which hit a seven-month high on Friday.
Data out earlier Wednesday suggested the US economy is marginally healthier than widely thought, although the outlook is still cloudy, at best.