Chicago PMI Screams Stagflation: Inflationary Pressures On The Rise As "Economic Growth Looks Very Disappointing"

Tyler Durden's picture

Following September's bounce, October's Chicago PMI plunged to 5-month lows. The 50.4 print is a four standard-deviation miss with new orders sliding, production tumbling, but prices paid surging to the highest since Nov 2014. So, stagflation looms as inflationary pressures build but economic growth outlooks decline.

The bounce from June to September... is over...

Chart: Bloomberg

As MNI reports, the latest data marked a weak start to Q4, with the three-month trend softening to 52.1 in October from 53.8 in the three months to September.

The Barometer decline was led by a slowdown in Production, which fell 5.4 points to 54.4, giving up most of the gain seen last month but remaining above the 2016 average. New Orders also subtracted from the Barometer, falling to the lowest level since May. Order Backlogs increased slightly, but failed to jump out of contraction territory, where they have been over the past three months. Employment saw a smaller rise, edging back above the 50-breakeven level and recovering some of the lost ground experienced in the previous month. Meanwhile, Supplier Deliveries fell to the lowest level since June.


There was evidence of a pick-up in inflationary pressures at the factory-gate. Prices Paid rose to the highest level since November 2014, following the recovery in the oil price and panellists also reported higher prices for steel and plastic products. Moreover, suppliers have been pushing for price increases in recent months and some of these pressures appeared to have materialised in October.

And as Lorena Castellanos, senior economist at MNI Indicators, explains...

"A key takeaway from the latest survey was the pick-up in Prices Paid to a nearly two-year high. Inflationary pressures are on the rise, which is one of the metrics the Federal Reserve has been waiting for to increase rates. However, economic growth ahead, as read by the October Chicago Business Barometer, looks very disappointing. Hopefully, it doesn't mark the start of a downward trend,"

Or put another way - the Chicago PMI report screams stagflation:

  • "inflationary pressures on the rise"
  • "economic growth looks very disappointing"

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Oldwood's picture


It's pretty damned obvious that the whole thing is a farce, that our fake economy is finally gaining the "traction" of reality.

SomethingSomethingDarkSide's picture

'Data Analysts' or 'Narrative Providers'?

sun tzu's picture

The globalist banker world order will wreck the economy if Trump wins

SomethingSomethingDarkSide's picture

Economy is already wrecked.

It's just a choice of having Citibank in charge of Bail Outs, or letting Creative Destruction wreak its beautiful havoc.

Dirtnapper's picture

No more Bail Outs, it's all Bain Ins.  Depositors are going to get screwed.

Dirtnapper's picture

It's not a question if they will wreck it, it's a question if Trump wins, can they hold off the collapse until he is sworn in.  Of course, they may have to crash it immediately so Obama can attempt to remain in power by declaring a national emergency.  Trump is poison to the Elites, problem is he maybe poison for the rest of us as well.


LawsofPhysics's picture

LOL!!!  Do humans really still believe in infinite eCONomic growth in a biosphere with finite resources and a myriad of biological cycles that consume energy and must keep turning in order to keep them alive?

LOL!!  Silly humans, time to thin the fucking herd, again.

SallySnyd's picture

 Here is an article that looks at how far into negative territory the Federal Reserve would have had to push interest rates during the Great Recession to get the economy back on its feet:


This gives us a sense of how desperate the Fed will be during the next recession when its current monetary policies become completely ineffective.

ebworthen's picture

The 70's again?  Does this mean Bell Bottoms, Disco, and Afro's will make a comeback too?

GunnerySgtHartman's picture

Silver prices are starting to go up.  Not huge increases, but they are starting.

FreeShitter's picture

silver and gold wont do anything meaningful until this shitshow finally breaks.

CHoward's picture

Fiction...I say fiction!!!! 

Infield_Fly's picture
Infield_Fly (not verified) Oct 31, 2016 10:21 AM

inflation applies to emerging market countries outside of the USD index


deflation comes with a recession/depression


and you know this is true because the fucking media keeps talking about inflation - perhaps to convince sheeple to BUY MOAR FUCKING SHIT!!!!

LawsofPhysics's picture

FAIL.  The flavor of fiat is irrelevant.

Eventually all those paper/digital claims will in fact start seeking out real assets.

This time is different in so much as this time it is the death of all fiat.

Producers will stop accepting fiat and demand something fucking real.

global Weimar motherfuckers.

I am Jobe's picture

Halloween will provide more positive momentum, where grown ups dress up like idiots

adr's picture

Retailers are desperate for Christmas. Halloween stuff was already put on clearance last weekend and today the sections were being dismantled. I guess there is no last minute Halloween buying this year. 

I don't know where all the leftovers from the shelves went, probably in the trash. 

Target is essentially offering 40% off toys with discount stacking. Kind of odd that the Christmas shopping season has barely started, and you can get 40% off. 

The stock market is within a few percent of all time highs,  supposed wealth creation galore,  and everything is 40% off. 

King Tut's picture
King Tut (not verified) adr Oct 31, 2016 11:08 AM

40% off of Star Wars Legos is still too expensive

fbazzrea's picture

deflation comes with a recession/depression

yes, but mostly on big-ticket/luxury items due to plummeting demand. everyday items people will need to survive--and safe-haven investments--will experience inflation due to lessening supply and steady, if not increasing demand.

urban and suburban real estate, new/late-model vehicles, five-star hotels/restaurants, pro-sport game tickets, etc., will deflate. milk, eggs, toilet paper--unused--not so much. when the SHTF, you still need to live, but with businesses failing all around them, profitable businesses selling staples will raise prices to survive the onslaught of govt's panicked tax increases against a backdrop of decreasing volume, supplier shortages, perhaps even govt rationing, etc. 

or so goes another theory.

stock up on essentials now. current prices and availability should not be taken for granted.

and of course, keep stackin'


Vin's picture

Regardless of who wins the election, the currency reset is coming. Get ready!!!

wholy1's picture

DUH!  Been my mantra since the 07/08 BEGINNING of the GreatER/Mother-of-all Depression[s].  Like most everything else "in this world" - ITS A PROCESS!

Let it Go's picture

The ECB and other central banks often claim deflation drives or allows their QE policy to remain and is central to their ability to stimulate. The moment inflation begins to take root or becomes apparent much of their flexibility in policy is lost. The 2% inflation target central banks have deemed optimum is not valid.

In the past I have put forth the idea that inflation could rule the day even if central banks are unable to keep the wheels on the bus and the economy collapses. This powerful force also known as stagflation can devastate those improperly invested. The article below explores the basis of this theory.