Chicago PMI Jumps To 6-Month High; 5 Sigma Beat

Tyler Durden's picture

Following last month's biggest miss in a year, Chicago PMI resurged to its highest level (and biggest beat) since October 2013. Optimism is rife in the report as the rise in new orders and production is now instantly extrapolated into escape velocity growth (as opposed to catch-up demand). Prices Paid dropped... which is odd if there's so much awesome demand? Employment improved, but did not offset March's decline. Of course, the 5 standard deviation beat of expectations is now considered the new normal...



“It’s a good start to the second quarter, and the increases in New Orders and Production lend support to growing views that US GDP growth is set to accelerate,”  Philip Uglow, Chief Economist at MNI Indicators said.



Index breakdown:

* Business activity has been positve for 12 months over the past year.
* Prices Paid fell compared to last month
* New Orders rose compared to last month
* Employment rose compared to last month
* Inventory rose compared to last month
* Supplier Deliveries fell compared to last month
* Production rose compared to last month
* Order Backlogs rose compared to last month
* Number of Components Rising: 5

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PlusTic's picture

it's funny how all these "surveys" are bullish, yet the hard data all sucks...time to stop the fraud!

Sudden Debt's picture



where 99% of the pieces are lost...

SAT 800's picture

Very good; you're hitting on all four cylinders today. The actual problem with the article is that there are no Sigmas involved. The data are not in a normal distribution so the concept doesn't apply. This is the kind of nonsense that the author of the Black Swan was warning you about; the ignorant mis-use of statistics.

SAT 800's picture

Amuzing; but not relevant. Trying to call attention to data by pretending, in ignorance, that it has or can have a Sigma, a number of standard deviations from a norm, is useless and foolish when the data do not form a normal distribution.

NotApplicable's picture

Care to educate us unwashed masses?

edit: Never mind, I see SWCroaker did so down-thread.

I already knew human behavior is unquantifiable. What I didn't know is that the PMI doesn't have any hard data in it.

Xibalba's picture

I trust the Chinese numbers more than anything coming out of Chicago. 

youngman's picture

Lots of different numbers today..some good..some bad...seems strange..they just dont gel

DavidC's picture

Certainly explains the indices jumping around like Mexican jumping beans.


SAT 800's picture

Very amusing, actually. The Stock Market is going up down and sideways all at once.

firstdivision's picture

So the economy moved to Chicago.  Can we count Chicago's output only as GDP and ignore the rest of the country?

all-priced-in's picture

Did they figure out a way to include murder in the index?



foodstampbarry's picture

Plugs Biden! Recovery Summer 6!

farragut's picture

"...lend support to growing views that US GDP growth is set to accelerate...”

We've heard this 20 quarters in a row. Next quarter for sure

Dr. Engali's picture

 I could be convinced that skittle shitting flying unicorns exist before I would believe anything coming out of Chicago.

firstdivision's picture

You know this is total bullshit from the responder, unless he means he bought less.

"* Prices Paid fell compared to last month"

SWCroaker's picture

Standard deviation should be restricted to real items, like measurements.   Heights of people.  Size of their backsides.   Temperatures in winter.

When you apply standard deviations to made up stuff like "expectations", "estimates", or "fantasies", you can get silly stupid results like a 5 standard deviation event.  Which sounds great but signifies either piss poor estimates, or idiots applying statistics to pools of guesses (e.g. nothing).

New_Meat's picture

one of the Boomberg dudes said (during the '08 meltdown) "folks that is a 13 standard deviation move"  or like once in the life of the universe.

Or, of course, your assessment is spot-on.

- Ned

venturen's picture

was the number printed on Rahm's stationary? 

medium giraffe's picture

You see Chicago?  I was right about promoting cheap deals through Groupon, wasn't I?  You owe me a drink.

ebworthen's picture

Instability volatility or B.S.

Where are the jobs?

Yardfarmer's picture
U.S. Economy Barely Grew in First Quarter
The American economy slowed drastically in the first quarter of 2014, as wintry weather depressed corporate spending and housing sector activity, while smaller additions to inventories by farmers and businesses also held back growth. At an annualized rate of 0.1 percent, the pace of expansion in January, February and March was the weakest since the fourth quarter of 2012, when output barely grew at all. It also represented a sharp deceleration from the level of growth recorded in the second half of 2013, when the economy expanded at a 3.4 percent rate. The first-quarter pace also fell well short of the 1.2 percent rate of growth expected by Wall Street economists before the Commerce Department announcement Wednesday morning. READ MORE »

Rising Sun's picture

Thanks for the bullshit Chicago.

Emergency Ward's picture

They omitted the Animal Spirits Index.

Colonel Klink's picture

Believable numbers out of SHITcago, nope!