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Chicago PMI slides in May

By Michele Maatouk

Date: Wednesday 31 May 2023

(Sharecast News) - Economic activity in the Chicago area tumbled in May, according to data released on Wednesday.
The MNI Chicago business barometer slid to 40.4 from 48.6 in April, coming in well below consensus expectations for a reading of 47.0.

Kieran Clancy, senior US economist at Pantheon Macroeconomics, said the drop in the headline index more than reverses the near-five point April spike and leaves it below 50 for the ninth straight month, although it is above its recent low of 37.9, last November.

"The Chicago PMI broadly tracks the lagged trend in civilian aircraft orders- Boeing is headquartered in Chicago- which jumped in the second half of last year, but aircraft orders have dipped more recently as the post-Covid rebound in air travel has petered out," he said.

"The full suite of regional manufacturing surveys points to a one-point drop in the national ISM manufacturing index, due tomorrow; remember that the regional surveys are much more volatile than the national ISM index due to their small samples.

"Either way, the big picture here is that the manufacturing sector remains firmly in recession, as the ongoing deterioration in domestic demand - due to higher rates and dwindling capital availability- is offsetting any boost from the re-opening of China's economy."

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