Chicago PMI Rises Even As Employment Index Slides To Three Year Low; Respondents Warn On Obamacare

Tyler Durden's picture

If there was any good news in today's Chicago PMI, it is that the headline number beat expectations of 51.0, rising from November's 50.4, to 51.6, leaving the two months of sub 50 prints in September and October in the past, or so the ISM institute would like us to believe. Because a casual glance at the data reveals that things are actually getting worse, with the Employment index plunging from 55.2 to 45.9, the lowest print in three years, while the all critical Capital Equipment buying policy plunged to a new 28 month low. So much for that CapEx spending. In fact the only indicator that posted an increase in today's release was the New Orders index which jumped to 54.0 while Order Backlogs, Supplier Deliveries, and Prices Paid all dropped. And for those hoping that in Q4 that inventory glut will finally clear itself, we have news: it won't -the Inventory index posted yet another jump, from 47.1 to 49.8. And while the data was ugly, perhaps the saddest, or funniest blurb, came from one of the respondents, which probably captures business sentiment in America with absolute precision: "We are on a hiring freeze in Q4, waiting to assess the outcome of the fiscal cliff deliberations. We are also planning cutbacks due to increased healthcare costs and Obamacare related expenses." Nuf said.

Full respondent list:

  1. Capital will shift to new products from current product support.
  2. We have more work than we have people to do build it, nice problem to have, except most of what we have needs to ship before the end of the year, backlog into 2013 is looking strong!
  3. Lots of uncertainty on 2.3% Medical Device Tax.
  4. We were forced to reduce staff this month because of weak order intake.
  5. We have received several smaller orders but some larger orders are still pending. Sales seem to be softening. Let's see what the new year brings.
  6. Sales and Marketing are expressing to operations our customers are forecasting the market to pick up in 2013, but then again we all know forecasts are 50/50; therefore we'll see, which is exactly where we are today.
  7. We just acquired a smaller competitor. But business in general is still quiet.
  8. We are forecasting higher Big Data costs originating from 3 areas. 1. Over the past 24 months we have witness a dramatic rise in the number data intermediaries and middlemen aggregating data and "locking up" access to information. From a procurement point of view, these  middlemen are performing a service and building out the data ghettos in places and channels that no one wanted to dive into. Their data products are specialized and difficult to collect and probably deserve their premium prices (for now). Costs are reflective of middlemen with "locked up" access prices keep increasing for data that was previously free, but tough to collect. 2. The large and sole sourced data generators (Big Boxes/Channel Masters) have been rapidly increasing the cost for access to their data and setting more restrictive limits on the usage of their data. 20% YOY increases are not uncommon for basic Big Data access fees. Growing demands for revenue sharing with some approaching 50% of gross revenue.
  9. Business borrowing remains relatively slow. Credit is difficult to obtain or is relatively expensive for all but the most economically healthy borrowers.
  10. We are on a hiring freeze in Q4, waiting to assess the outcome of the fiscal cliff deliberations. We are also planning cutbacks due to increased healthcare costs and Obamacare related expenses.

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Shizzmoney's picture

Who needs workers, jobs, incomes?  Jaime Dimon and the rest of the 20% will just buy up the rest of the crap made by foreign countries, anyways.

ihedgemyhedges's picture

Chicago PMI up???  Why be surprised?  GM cranking out channel stuffed inventory like crazy while still owned by the gov't................and of course Ally printing 0%, $0 down offers like the subprime lenders they are......

Snakeeyes's picture

Ha! Respondents cite Obamacare warnings. No guff, Chet! Obamacare taxes are a killer!

economics9698's picture

Life is good when you can print the medium of exchange.

Cursive's picture

I'm guessing responsdent #2 works at a funeral home.

Killtruck's picture

...or the U.S. Military.

Dr. Engali's picture

When you consider the amount of murders in that city one would guess that the funeral home business is booming. That is of course if people can pay.

Mike in GA's picture

Just guessing at the demographic but I'd say it's like pulling teeth. ;)





(plus you don't have to deal with all that nasty cash)

economics9698's picture

Drug dealers include funeral cost in their employment agreements.

Cognitive Dissonance's picture

If we don't believe the vast majority of government/corporate "numbers" why are we so focused on the numbers?

francis_sawyer's picture

Who says we are?... I just come here for the gratuitous insults...

Cognitive Dissonance's picture

No doubt about it........Zero Hedge does give the best S&M.  :)

economics9698's picture

ZH is the only place I can say shit, fuck, Jew, Yid, Negroes, NWA, and other insults banned in the Zionist controlled media. 

SanOvaBeach's picture

oh, good!  GO FUCK YOURSELF!  feel better?

Quinvarius's picture

Pump as much money into the system as you can.  But makes sure none of it actually hits the productive economy.  Make sure the only way you can preserve wealth is to bury it.  What a fantastic recipe for the complete destruction of an economy.

Now lets all pretend we are going to become Japan, whose currency was propped by the USA for 2 decades, and not Weimar.

Zap Powerz's picture

Speaking of Shitcago, they passed a very important milestone today:,0,5456581.story

Gun control works (at reducing the population of minority males)!

IridiumRebel's picture

If you park on the streets in Chicago, prepare to pay more in the 2013.


Once again, rates at Chicago's parking meters are going up. For some city street parking, it's a significant price increase.

As recently as 2008 it cost 25 cents an hour to park on the street in some Chicago neighborhoods. In 2013, drivers will need eight quarters to park for an hour, and in the Loop, it will cost a whole lot more."It's unfair," said Joe Nedbal. "The only person that's really losing out is the common man that's just trying to make a buck every day and park as close as he can to work, try to make it through these winters."


It's a distinction Chicagoans aren't proud of: Home of the most expensive street parking in the United States.

Starting New Year's Day, rates in the Loop will go up to $6.50 an hour, the most expensive in the country, and an increase of 75 cents over this year and $3 since 2008.

"That's tough. I definitely will be looking at taking much more public transportation when I can," said John Frizzell.

Parking in crowded Manhattan is cheaper than the Loop at $5 an hour. In Los Angeles, where everyone drives, the highest rate is $4 an hour. And on the narrow streets of Boston, the most they pay to park is $1.25 an hour.

In the central business district, near the Loop, rates are going up to $4 an hour, and in the neighborhoods, the rate increases by $2 an hour.

At Village Eyecare in Little Italy there was concern it will impact their customers.

"It's going to make it harder on them to make it here into the office, and obviously affects their pocket, which impacts our business," said Dr. Seth Sarai.

"It's terrible. I'm probably going to start going to the suburbs or take public transportation," said Nelly Delfini.

Some drivers have nicknamed the parking pay boxes "Mayor Daley Meters," a reference to the former mayor's 2008 decision to lease the city's meters to a private company, Chicago Parking Meters LLC.

Current Mayor Rahm Emanuel has ordered a full review of the 75-year contract, but few are holding their breath.

"Seems like this deal was a signed contract," said Dr. Sarai. "It's unfortunate for all of us who live in the city."

Still, Cesar Rolon isn't convinced what's done is done. Rolon started an online petition this week, hoping to send political leaders a message.

"We're hoping for thousands of votes," Rolon said. "Just letting the politicians, our congressmen, our state reps know, that we've had enough. And that's why they're in office, to represent us."

The city leased its parking meters for $1.15 billion to Chicago Parking Meters LLC. The company's own documents show that it expects to earn 10 times that amount over the life of the lease. The company declined ABC7's request for an interview.

This may not be the last increase we see. The contract allows for future increases based on the rate of inflation, starting in 2014.

The transition to the new rates will start in the downtown area and move outward into the neighborhoods. Weather conditions permitting, the goal is to complete the transition by the end of February.

As the transition moves forward, motorists are only responsible for paying the posted rate on the meters.

Fantasy Planet's picture

The meters also accept Yuan and Jiao. 

GCT's picture

Zap most gun crime is indeed criminal on criminal crime.  Where I live most of the crime is black on black protecting their turf.

s2man's picture

Blurb.  I haven't heard that word in a long time.  I like it better than sound-bite.

SheepDog-One's picture

The worse things get, the better things are!

Marley's picture

"Now lets all pretend we are going to become Japan, whose currency was propped by the USA for 2 decades, and not Weimar."

Damn, spit my coffee up.  While we're at it, let's also pretend anyone has a clue. :)

tooriskytoinvest's picture

Dockworkers threaten strike to shut down ports from Boston to Houston which could cost companies $1 Billion A Day...

SanOvaBeach's picture

Make it easy for the simple minds out there!  Everything is Obama's fault.

IridiumRebel's picture


Washington (CNN)– Craft store giant Hobby Lobby is bracing for a $1.3 million a day fine beginning January 1 for noncompliance with the Patient Protection and Affordable Care Act, dubbed Obamacare.

The company opposes providing some contraceptives to employees through its company health care plan on religious grounds, saying some contraceptive products, like the morning after pill, equate to abortion.

After failing to receive temporary relief from the fines from the Supreme Court, Hobby Lobby announced late Thursday through its attorneys that it "will continue to provide health insurance to all qualified employees. To remain true to their faith, it is not their intention, as a company, to pay for abortion-inducing drugs."

 In September, Hobby Lobby and affiliate Mardel, a Christian bookstore chain, sued the federal government for violating their owners' religious freedom and ability to freely exercise their religion.

orangedrinkandchips's picture

COSTS, COSTS, COSTS....If one watched the "men who ripped off  built Amerika on the History's a great series, fascinating. BUT...The #1 word mentioned in the whole series...COST.


COSTS. Life or death of not only every single business but capitalism at large!


Now "HEALTH CARE AT THE POINT OF A GUN" is not the answer......

karzai_luver's picture

Dr. Killdare would of course disgree!!


As most industry in this country, the gvt is the enforcer for their monopoly, obombocare is about extending the medical industry ponzi for a little longer.


SRVDisciple's picture

"Chicago" is a stripper name, right? Maybe some Pamprin will help her with these PMI mood swings.

astoriajoe's picture

I just saw a ZH banner ad for a Bergdorf Goodman 60% off sale. I thought the 1% was still doing well.

youngman's picture

The way the politicians work...there are so many hidden increases in taxes...regulations...rules...that will hit January 1....we are just hearing about the Farm bill today and its hidden costs...all this will come out and have to be paid by the masses....I think that is when the TRUTH hits alot of people....and of course many companies will not pay and will be sued or fined because they "did not follow the law that no one knew until after it was in force and even the accountants do not know how to follow it"....crap.....but that is how politicians run a business....out of business..

karzai_luver's picture

anyone "just hearing" about the farm bill welfare is too dumb to be a postin .............

How do you feel about all your food being a product of a welfare program anyway?


I won't wait around.good day.


SuperDeDuper's picture

Sell everything, taxes are going up.  No brainer.

ZFiNX's picture

Like you can believe anything out of Chicago, ha! Ignore their statistics until 2016.

markitect's picture

I'll tell you from boots on the ground in Chicago that manufacturers are barely holding on.  Zero expansion plans, deffered maintenance projects, deferred everything.  We do a lot of construction for small and medium sized manufacturing plants and warehousing - the last few years plant managers have put off every construction project they could.  Unless something breaks its not being fixed.  I bet that cap ex is lower than reported.  We used to prep buildings for new machinery- not so much anymore.  Unless a fork lift drives through a wall they aren't touching their buildings.

L_Conquistador's picture

I think the economy is doomed, and Obamacare is going to make it worse (if that's possible).   I also think Dear Leader wants to cover up the fact that Obamacare and other policies from his administration are damaging, and that's why he wants to go over the cliff.   Going over the cliff is a destraction.