Chicago PMI rises more than expected in August
Economic activity in the Chicago area improved more than expected in August, according to figures released on Friday.
The MNI Chicago business barometer rose to 50.4 this month from 44.4 in July, beating expectations for a reading of 47.5. The index had been in contraction territory for the previous two months.
"The survey still suggests a softer overall tone in business activity despite the August pick-up in sentiment, as the three-month average fell again, dipping to 48.2," the MNI said.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the PMI was much better but still soft and there are downside risks ahead.
"The Chicago PMI often tracks movements in orders for Boeing aircraft; the company has its HQ in the city. The combination of a grim period for Boeing, after the 737MAX disasters, and the intensification of the trade war, drove it down sharply in recent months," he said.
"The August rebound, then, is a welcome development, though the survey is erratic and one month’s data proves nothing. Taking into account this survey and other regional reports, we now expect to see the national ISM manufacturing index for August rise to about 52, from 51.2, though we expect the impact of the latest intensification of the trade war since August 1, when tariffs on consumer goods were announced, to drag all the manufacturing surveys down again over the next couple of months."