Chicago PMI points to solid US economy
Strong Chicago PMI figures for January underscored the solidity of the US economy as home sales rose as expected in December.
The Chicago purchasing managers index measures business conditions across the midwestern states of Illinois, Indiana and Michigan and is seen as an indicator for US manufacturing activity.
The January result of 65.7 was a drop-off from the 67.8 figure recorded in December but was ahead of expectations of 64.1. With a score above 50 seen as positive the slight dip from a month earlier will be viewed as immaterial.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the Chicago result suggested a moderate decline in the national ISM manufacturing survey due on 1 February but that this was not a concern.
"This is a very modest decline, leaving the Chicago PMI still at a very high level. Other key regional surveys softened a bit in January too, so we have to expect a small dip in the national ISM index. We look for the headline to slide to 58.5 from 59.7. Again that's very strong, and it signals clearly that the robust manufacturing recovery continues."
In the housing market the pending home sales index for December rose 0.5%, up from 0.3% in November and broadly in line with expectations.
Taken together the surveys provide further evidence that the US economy is growing strongly. However, doubts persist about how durable the trend is as households dip into savings for purchases and stock markets reach levels some analysts say indicate a bubble.