Chicago PMI Indicates Recession

The Chicago Purchasing Managers Index for October fell much more than expected, falling to 37.8 from 56.7 in September. The market had looked for a decline to 48. This brings the index back down to its lowest level since the 2001 recession. Any reading below 50 indicates contraction.

Production plunged from 71.4 in September to 30.9 in October. New orders fell from 53.9 to 32.5. Order backlogs fell to 39 from 54.9, while inventories rose to 56.5 from 37.7. Employment fell to 41.5 from 49.1. Nothing was positive in this report except for the inflation front, where prices paid fell to 53.7 from 80.7.