Chicago PMI improves more than expected, but rising prices a concern
By Benjamin Chiou
Date: Friday 28 Feb 2025
(Sharecast News) - Economic activity in the Chicago area contracted for the 15th straight month in February, according to a purchasing managers' index (PMI) released on Friday, though the downturn eased more than expected.
The Chicago Business Barometer, published by the Institute for Supply Management (ISM), increased for the second consecutive month, rising 6.0 points to 45.5, its highest level since September.
While the PMI remains firmly below the neutral 50-point level which separates growth from contraction, analysts were expecting only a slight uptick to 40.6 from January's print of 39.5.
Four of the five sub-components - production, new orders, supplier deliveries and order backlogs - all improved month-on-month, while employment worsened.
However, one major warning sign came in the form of prices, with the prices paid sub-index jumping 16.9 points - the largest monthly increase in nearly 70 years - taking the measure to its highest since August 2022.
A quarter of respondents to the survey said they expected to keep prices steady in 2025, while 75% predicted an increase, with 25% of those forecasting price hikes of 4% and above.
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