The Chicago PMI collapsed from 52.4 to 49, the first reading below 50 since Sept. 2009, all while Deliveries, Prices Paid, and Production hit their lowest levels since 2009. Except for a minor gain in New Orders, all business activity measures weakened in April, with five of seven now in contraction.
This is a diffusion index, so a reading above 50 indicates expansion, while readings below 50 indicate contraction. Some market observers are saying the economy appears to be back in “stall speed.” I personally wouldn’t bet the farm based on one report.
General Comments from Members of the Survey Panel
- Business activity was soft again in March, but we are optimistic for 2nd quarter and overall for 2013. Seems like some key raw materials are forecasted to moderate and even decline a bit over next several months, e.g. linerboard, resins.
- Our orders are consistent, we have a steady flow of work currently, 1st quarter was a huge improvement from 2012 start.
- New order intake is steady but remains at the lowered 2012 level. Afraid this may become the dreaded “new normal”.
- “Business is steady as she goes.”
- The economy is looking as if it is turning the corner. It is slowly gaining and looks like it will continue to do so.
Read the full report here.
Contradicting the Chicago PMI, Consumer Confidence beat expectations to the upside by the most in 14 months.