U.S. Chicago Business Barometer Edges Higher in September

Summary

The ISM-Chicago Purchasing Managers Business Barometer rose to 46.6 in September after increasing to 46.1 in August from 45.3 in July. The latest reading was the highest in three months following sharp declines early in Q2. The index remained well below the last expansion level of 55.6 in November of last year. A September reading of 45.9 had been expected in the Action Economics Forecast Survey.

Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure fell to 47.1 in September from 48.2 in August. Nevertheless, the latest reading left the Q3 average at its highest level this year.

A rise in the employment index to 44.5 in September from 39.5 in August lead the sub-index gains this month. It was the highest level in six months as an improved 12% (NSA) of respondents reported higher employment and a lessened 24% reported it lower. The order backlog index rose to 38.9 from 33.6. It was the highest level in three months. Moving lower in September was the new orders index to 44.0 from 45.1. A lessened 19% (NSA) of respondents reported higher orders while a higher 32% reported them lower. The production series eased to 46.8 this month from 47.9 in August. A lessened 17% of respondents reported higher production while an increased 27% reported it lower. The inventories series declined to 46.3 after rising to 49.9 in August. It remained up from a 36.1 low in July 2023. The supplier delivery index dropped to 53.8 lat month from 58.7 in August, remaining above the break-even level of 50 for the fourth consecutive month.

On the inflation front, the prices paid series surged to 74.3 in September from 66.0 in August. It was the highest level since August of last year, up from a July low of 55.8. An increased 47% of respondents (NSA) reported higher prices paid in September while a steady three percent reported price declines.

The Chicago Business Barometer is considered to be a leading indicator of the U.S. economy. An indicator reading above 50 indicates expansion while below 50 suggests contraction. Summary data are contained in Haver’s USECON database with detail including the ISM-style index in the SURVEYS database. The expectations figure from the Action Economics Forecast Survey is in the AS1REPNA database.

About The Author

Thomas J. Moeller

Haver Analytics is pleased to bring Thomas J. Moeller’s commentaries on the state of the U.S. economy to its clients.

Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters’ Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.

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