Chicago Puchasing Managers Signals Recession Bias

[marmar]

from 24/7WallStreet:



Chicago Puchasing Managers Signals Recession Bias
Posted: May 31, 2012 at 10:32 am


For a Purchasing Managers report to be in recession and/or true contraction, the reading needs to be under 50.0. The May report from the Chicago Purchasing Managers Index came in at 52.7. Bloomberg had a consensus reading of 56.1 expected and the prior report in April was up at 56.2. Each of the prior 4 reports were above 60… Two components of the index are already signaling contraction rather than just a slo
wing of growth.

The index actually came in at the lowest reading since September 2009. New orders came in at 52.9, which is also the lowest growth rate since September 2009. Ditto for the Production component right at the 50.0 mark.

Another issue is the Backlog component, which came in under 50.0 at 46.3 and that is now the third contraction for more than two years. The prices paid component fell to 60.4 from 68.6.

What is sad about the readings here is that two components (Backlogs and Inventories) have gone under the 50.0 mark. All 7 components of the index fell in May versus April and that is not a good sign. ...............(more)

The complete piece is at: http://247wallst.com/2012/05/31/chicago-puchasing-managers-signals-recession-bias/#ixzz1wSUhkRK3