In August, the Chicago PMI dropped from 58.8 to 56.5, holding up surprisingly well compared to the other business confidence indicators. The consensus was looking for a decline to 56.5. The breakdown shows production (57.8 from 64.3), new orders (56.9 from 59.4), order backlog (49.6 from 55.7) and inventories (52.9 from 53.2) deteriorated in August, while employment (52.1 from 51.5) and supplier deliveries (60.5 from 55.9) improved. The Chicago PMI held up relatively well.
Unfortunately, the index is still at its lowest level in almost two years. While the business confidence indicators at the start of the month were extremely weak, there are signs that sentiment improved somewhat during the month, which might be good news for today’s manufacturing ISM.