Underwhelming Business Activity Sours Mr. Market’s Mood
ISM-Chicago reported on Tuesday that the Chicago-area purchasing managers index fell from 52.4 in March to 49.0 in April, a three-year low. Economists were expecting the index to remain flat at 52.4.
Supplier deliveries, prices paid, and production all fell to their lowest levels since 2009. Order backlogs logged its tenth month of contraction out of the past twelve, while the employment index logged a third consecutive month of declines. Inventories are being worked down while supplier deliveries shorten, suggesting that there is slack in the supply chain. Falling prices paid also suggests some slack.
ISM-Chicago curated some commentary from its survey and included it in the report. Here are the responses:
Markets were mixed and relatively flat on Tuesday following the news. Mixed earnings along with the unexpected drop in business activity tempered gains made on Monday.
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