EmailThe Chicago Purchasing Managers Index from Kingsbury International, Ltd., increased from 56.6 in May to 61.1 in June. This was the first increase in the Chicago PMI since February. The Briefing.com consensus expected the Chicago PMI to fall to 54.0.
Since the auto sector factors prominently in the Chicago region, the unexpected increase suggests auto manufacturing is ramping back up quicker than most economists anticipated following the supply-induced slowdown from the Japanese earthquake and tsunami. The production and new orders indexes rebounded in June, but still remain below April levels.
The production index increased from 56.0 in May to 66.9 in June, down from 70.0 in April. The new orders index increased from 53.5 in May to 61.2 in June, down from 66.3 in April.
For the first time since September 2010, order backlogs slipped into a contraction cycle. The index fell from 51.7 in May to 49.3 in June. Without a steady supply of backlogs, a drop in orders could carry over to an immediate drop in production.
The employment index fell for the third consecutive month, from 60.8 in May to 58.7 in June, but remains high enough to support payroll growth.
