The Chicago purchasing manager's index for May
- Prior was 50.4
- New orders shrank
- Prices paid grow at slower pace
- Employment shrank
- Production shrank
Note that the Chicago PMI is released to subscribers three minutes before the official release.
The miss isn't a big surprise given that all the regional manufacturing numbers so far in May have been weak.
The May MNI Chicago Business Barometer fell to the lowest since Feb and registered the 6th month below 50 in past year. Data was weak with Production and New Orders back in contraction. While Employment and Backlogs contracted at a slower pace, Backlogs has been sub-50 for 16consecutive months and Employment below 50 in 10 of 12 past months. Supplier Deliveries stayed at the highest since Oct 14 amid commodity shortages and capacity issues as many suppliers remain under-inventoried. With Backlogs up, Production down and lead times long, many companies reduced stocks, with Inventories down to the lowest since Nov 09. This has forced some companies to "pay up" for either raw materials or transportation in an effort to obtain goods as needed. The Barometer Apr-May avg is 49.9, so unless June is stellar, this could be the weakest quarter since Q4-15. Prices paid eased slightly.
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