Chicago PMI falls in June
Economic activity in the Chicago area unexpectedly deteriorated in June, according to data released on Wednesday.
The MNI Chicago business barometer fell to 66.1 from 75.2 in May, missing expectations for a reading of 70.0. However, through the second quarter, the index rose 7.9 points to 71.1, hitting its best quarterly level since the fourth quarter of 1973.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the Chicago PMI has been even more volatile than usual in recent months, probably because it is uniquely sensitive to swings in orders for Boeing aircraft.
"Boeing orders have rebounded in recent months, though cancellations have continued at a high level too. Overall, though the effect on the Chicago PMI has been positive, but the month-to-month movements are very hard to predict.
"Today’s number brings the Chicago index back into line with the national ISM manufacturing index, after a couple months of overshoots. The indexes follow the same trends over time, but they often diverge in the short term. The bigger picture here is that manufacturing activity continues to rise at a rapid pace, with no break in sight, though it’s likely no longer accelerating.
"Most of the recent surveys - including the Milwaukee PMI, also released this morning - are beginning to hint that supply-chain problems are peaking, though remember as always that the biggest threats to core inflation are in the services sector, not goods prices."