After bouncing miraculously in June (to 18mo highs), slipped lower in July and has now tumbled in August to 51.5 (missing expectations of 54.09 markedly).With weakness across the board – new orders, inventories, and production all slumping – MNI warns, "Economic activity slowed down into the summer, suggesting June's momentum was only a temporary revival in activity. Overall, it wasn't a rosy month."
The June jump has been erased…
Chicago PMI was weak across the board…
- Prices Paid fell compared to last month
- New Orders fell compared to last month
- Employment rose compared to last month
- Inventory fell compared to last month
- Supplier Deliveries fell compared to last month
- Production fell compared to last month
- Order Backlogs fell compared to last month
- Business activity has been positive for 7 months over the past year.
The MNI Chicago Business Barometer fell 4.3 points to 51.5 in August from 55.8 in July, led by a large setback in Order Backlogs and a deceleration in New Orders.
Four of the five Barometer components fell between July and August. Only Employment increased, hitting a 16-month high. The latest fall left the Barometer, New Orders and Production running at the slowest pace since May, when they all slipped below 50.
Order Backlogs fell 14.5 points to 41.7, moving back into contraction territory as they hit the lowest level since April 2016. Backlogs were above 50 for only two months (June and July) following a 16-month run of sub-50 readings. New Orders and Production also subtracted from the Barometer in August. Although both remained in expansion, they were much softer than at the end of Q2.
Supplier Deliveries were little changed on the month while the three buying policy measures shortened, a positive for businesses but another indication of weaker overall activity.
Building on July's strong pickup, Employment posted its highest reading since April 2015. Adding to this, August's special question showed a few Chicago panellists were slightly less pessimistic than a year ago about hiring over the next three months. Although most reported they were not planning to hire in three months' time, this percentage fell to 58% in August 2016 from 63% in August 2015. Also, those who said they plan to add both temporary and permanent employees rose to 21% from 15% a year ago.
Fewer firms expanded their inventory levels, with the indicator falling just below 50, having increased to the highest since October 2015 in the previous month.
It appears the dead-cat-bounce is over.
via http://ift.tt/2bBC0SJ Tyler Durden