Chicago Purchasing Manger Index Rises Most in a Year

The Chicago Purchasing Manager index of nationwide business conditions jumped to 57.9 in August, versus 50.8 in July, for the highest reading since June 2007. Any reading above 50 indicates growth.

Big increases in production (63.4 vs 49.2, and fastest rise in 4 years), new orders (60.2 vs 53.5, and highest level in almost a year), and order backlogs (63 vs 45.7), offset a small decline in inventories (52.2 vs 54.9) and a big drop in the employment index from 45.9 to 39.2.

Businesses also took note of moderation in fuel costs, as the price index fell 10 points to 80.6, a 6-month low, after reaching a ten year high last month

The stregth in the Chicago index is at odds with the other regional surveys, especially when you consider the heavy weeighting of the auto industry in this regional survey. But, export demand clearly remains strong for the machinery produced in the Midwest.