Chicago Business Barometer Approaches Growth Levels at 49.6 in June
517
Views - Printer Friendly - Email
This Story To A Friend
The ISM-Chicago business barometer remained below 50 for the fifth consecutive month in June, yet improved more than expected, coming in at 49.6, against expectations that it would fall to 48.0 from 49.1 in May.
"The threat of an economic recession spreading from the housing and credit sectors has yet to materialize, but economic growth remains negligible at best," said spokesman Jack Bishop in the report's summary. "Perhaps the mantra of fear of a recession has obscured an economy whose major weakness is declining employment as well as spreading inflation."
Despite the increase in the headline, production fell over six points to slide into contraction at 45.1 following three months of growth levels, while new orders remained in growth but fell back to 52.0 following a reading of 56.1 in May.
Employment continued in contraction for the seventh consecutive month but saw some improvement to 46.7 in June, up from 41.2 in May.
"By way of context, the average Barometer reading during the past 6 recessions (stretching back to 1969) was 41.7, much lower than the 48.5 average reported for the first half of 2008," Bishop added.
The prices paid component remained elevated at 85.5, a slightly slower pace than the previous month's 87.5.
"Ruts are not necessarily bad, but it is hard to find satisfaction in a year characterized by little or no economic growth and expanding inflation," the report said. The survey "remains stuck in the mid-to high 40s, signaling slowing economic activity. The Prices Paid Index added a fourth consecutive month of plus 80 values, joining the club of 14 such time periods since 1946."
Eric Lascelles, chief rates and economics strategist at a TD Securities, said he "continue(s) to possess a below-consensus forecast for tomorrow's ISM Manufacturing report of 48.0, driven both by recent woes at the corporate level, plus by the substantial weakness shown in the Empire, Philly Fed, and Richmond Fed indices."
Each of those surveys showed negative growth in June, and topping it off was a record-low in Milwaukee ISM survey, which was released just after the ISM-Chicago on Monday morning.
The report follows broadly negative results from other regional manufacturing reports this month, as contracting figures were reported in each of the Richmond, Kansas, Philadelphia, and New York Fed surveys.
The Chicago Business Barometer is released by the Institute for Supply Management and Kingsbury International.
By Patrick McGee and edited by Cristina Markham
©CEP News Ltd. 2008
Related Tags
Select a Tag for more information related to that Tag. (View
All Tags)
chicago business barometer |
