Chicago PMI Plunges To Lowest Since November 2009, Biggest Miss To Expectations Since September 2009

Tyler Durden's picture

... the only question is whether the number,which printed at 56.2, down from 62.2, and missing expectations of 60.0, is horrible enough to send stocks soaring. Based on some of the core numbers it may be: the headline nuimber was the worst since November 2009, the miss was the biggest since September 2009, Production of 57.1 was the lowest since September 2009, New Orders slide to 57.4 from 63.3, Supplier deliveries lowest since September 2011, and so on. The only good print was employment which mysteriously rose from 56.3 to 58.7, just in time for the NFP print to come really, really ugly. On, and Joe LaVorgna was at 61.0: way to earn that bonus Joe. ISM downward revisions to come. But not from Joe- look for upward revisions there. Finally, comment #6 from the PMI respondents says it all: "Despite all of the rhetoric to the contrary, it looks like the air got let out of the balloon."


The most interesting part from the release, the survey respondents. #4 FTMFW. #6 and #9 are pretty good too.

  1. Seems there is a calm out there.
  2. Extensive off-shoring of manufacturing not without unseen cost. Apron strings are much harder to
    cut than originally anticipated. Improvements are often slow and painful. Yields far lower as a
    result. Tight inventories at suppliers continue to constrain inventory turn improvements by
    increasing risk of spike induced outages.
  3. High oil cost is creating a cost burden for inbound freight & higher material conversion costs. A
    sustained increase in the cost of oil (or staying high at the current cost) will have a negative
    impact on our business and the economy in general because goods and services will cost more and
    the population will have less to spend on those goods and services. Much of the oil rise seems to
    be speculation and is rooted in the fear of lack of supply rather than true supply and demand.
  4. Same, same.
  5. Generally seeing a positive trend in orders.
    Some supplier lead times are decreasing. Their backlog is decreasing as is ours.
    Automotive related orders have greatly increased from one year ago, but other areas of business
    appear to be softening.
  6. Despite all of the rhetoric to the contrary, it looks like the air got let out of the balloon.
  7. New orders down a little this month but testing & quoting is up. We are expecting a lot of orders
    in the near future.
  8. China inflation to hit in second Qtr.
  9. Lending is picking up but only to borrowers with stellar credit.

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Cognitive Dissonance's picture

Who could have forseen?

My my, what a pickle we seem to suddenly be in. Time to call Ben.........again.

GetZeeGold's picture



Screw's time to call Fox Force 5.


Cognitive Dissonance's picture

Agreed. They are a force to be reckoned with.

"Fox as we're a bunch of foxy chicks. Force as we're a force to be reckoned with. Five as there's one ... two ... three ... four ... five of us." The Fox Force Five is a group of assassins, each with their own specialty. It first appeared in a dialogue in the movie Pulp Fiction. One can use this as a term of respect, irony or insult.

TalkToLind's picture

Douglaswould you please pass the catsup?

tempo's picture

27% miss on CA income tax collections ($6.7B vs $9.1 B). No one seems concerned out here.

CH1's picture

No one seems concerned out here.

No one seems concerned about anything, anywhere.

All hail the entertainment corps!

Peter Pan's picture

If this is the result with so much government deficit spending, what are we to expect if the USA is to ever adopt austerity?


Peter Pan's picture

A successful one I hope, otherwise let's stick to deficit spending

Things that go bump's picture

The best chance since the Civil War to get this gorilla off our back. Maybe this time we can all secede.    

GeezerGeek's picture

Since government spending (not to mention regulation) is a drag on economic activity, were the USA to practice austerity (meaning the government reduced spending to match income) I think the economy would improve a bit. If the EPA, FDA, OSHA, DHS, TSA, DoE (Education), DoE (Energy), etc. all took a year-long hiatus and no one enforced the rules the economy would recover even faster.

Think of the government metaphorically as friction. Friction impedes movement. Less friction begets easier movement.

pods's picture

Yeah, but using your analogy, that government deficit spending also acts as friction to that gigantic debt snowball rolling down the hill after us.


Debt-Is-Not-Money's picture



Friction is to inertia


The Debt Snowball is to momentum


LetThemEatRand's picture

If austerity is imposed for the banks and 1% who have great personal wealth in the stock market, a short period of pain then a turn around.   Otherwise, your question is already answered.   We already have austerity for the masses in the form of shrinking employment numbers, lower wages, shrinking home values, high cost of credit, etc.   The current non-austerity program is trickle down on steroids.  Because it worked so well the last 40 years, let's double down.

RoadKill's picture

You will see in about 3 months.

Take each country's GDP growth rate and subtract its government deficit as a % of GDP thats their Austerity growth rate. US economy would look EXACTLY like Euro zone if we ran a deficit of 3% instead of 10%.

Btw - props to the Repubs for passing the FICA tax cuts with no spendingg off set! Prevented them from getting creamed and brought the debt ceiling fight to right BEFORE the election instead of after. BRILLIANT maneuvoring. Maks my TZA pay off 6 months earlier. Gets the Tea Party reinvigorated. Makes the discussion all about the 6 trillion Obama has added to the debt in 4 years.

Problem is Im not sure I want Romney to win. Dont want him to get blamed with what is going to happen no matter who is in office. You can cut spending and watch us go into another recession or you can keep spending and watch us go bankrupt. Neither choice will get you reelected or let you keel the House and Senate.

Let Obama get reelected and watch him REALLY run us into the ground so that the libs are once and for all discredited as a political force in the country.

Breaker's picture

The next presidency may well be a poison pill. Whoever gets it will preside over a crash. A big one. Don't much like Romney. But, OTOH, having a hardcore socialist/fascist as president grabbing the opportunities created by a crash to centralize everything scares the pants off of me.

Breaker's picture

"...what are we to expect if the USA is to ever adopt austerity?"

A couple of really bad years and then a healthy recovery. Some president has to have Reagan's balls. Reagan put us thru two really bad years at the start of his first term with 18% home loans, high unemployment etc. He spent the political capital needed to reset the economy. The correct remedy today is drastic cuts in government spending. Romney doesn't, I think, have the cojones to do that. Obama has no desire to do it. So reality is going to have to create the austerity. At some point, it will.

The longer we put it off, the bigger the riots.

lizzy36's picture

The last batch of economic numbers are not good for Obama.

So the issue is whether Bernanke does anything in June (has to be drop dead date pre-election) or sits on his hands?

Interesting times......

sschu's picture

If Bennie does not start soon, then forget about it, not sure June is maybe too late.  If this was the game, they should have started back in January and they should have crushed the price of oil and PMs first.

The 8/80 theory may still hold, UE over 8% and WTI over $80 on September 1 and Bam is toast IMHO.

Makes one wonder why none of this has happened?  Maybe they have something else in mind, they couldn't pull it off, or the Bamster has worn out his welcome/is no longer useful to those pulling the monetary strings.

We could be looking at a September, 2008 rerun, the price of oil in early 2008 really hurt the economy.  Hope not.



DeadFred's picture

The employment figures are easy since they are government generated, they will be what they are supposed to be. WTI under 80 is a pipe dream so they may want to sub in another figure, maybe S&P over 1500. The market is rising on nasty data, why? Where is the money coming from to drive these moves? Even with vapor volume it take real fiat (oxymoron?) to drive these moves.

Silverhog's picture

Your the man Ben.

Sudden Debt's picture

Oups.... What can I say...

Hedgetard55's picture

No sweat, Ben has the market's back (and shorts' backsides).

slackrabbit's picture

Krugman says this is bullish

TradingJoe's picture

Ben, Bubba, we're falling appart man! Do something, anything, but do it! And do it no later then June! :)))

DormRoom's picture

Fiscal cliff Jan. 2013.   Let's see if American politicians can reach consensus before finanpocalypse.

azzhatter's picture

oh, they'll come up with some completely nonsensical solution to all our problems. They'll cut $10 million in spending per year for the next 12 years and it will be hailed as a stick save.

Debt-Is-Not-Money's picture

False-flag operation.

Body check!

Things that go bump's picture

It'll have to be something really massive to distract attention from the death of the economy, something along the lines of a dirty suitcase bomb or a massive release of anthrax in a high population density area.  


What does it matter? The economy could completely implode and the "numbers" would never reflect it.

DOW +100

jus_lite_reading's picture

I see nothing but GREEN SHITS here...

Village Smithy's picture

I would love to know more about the company that submitted comment #2. "Unseen cost" like "yeah, my wage costs are down but there's nobody left to buy my products, I wish I were Apple".

azzhatter's picture

and rising employment?

JasperNewtonDaniel's picture

And the market heads higher.  Reality has been suspended until the inevitable collapse.  That is all.  We now return you to the regularly scheduled farce.


The whole world is depressing me. Depressing news everywhere dovetailed by an almost assurance the Obama will win again and even if he does not it would them be Romney and that just makes me want to puke. Sure I'm stacking silver & thats great for me but what about America? What about our freedom? It seems the only happy Americans these days are the ones with their heads in the sand. It all sucks man... What are we to do??? Anyone??? 

Ben Burnyankme's picture

Freedom?  What Freedom?

What was Winston Smith's solution?

Ostapuk Ivano's picture

Varick Street? I did the Utica club brewery tour. Good stuff

Vince Clortho's picture

Spread the word to those people who "have their heads in the sand".

Pooper Popper's picture

Lets have a big parade,with lots of glitter and leather!

dwdollar's picture

QE3 rumor in 3, 2, 1...

vincent van goo's picture

Automotive related orders have greatly increased from one year ago,


Do not fully understand the Chicago PMI entails.  Would the bump in automotive come from sub prime car loans?



GetZeeGold's picture



So have dealer inventories.......kooky how that works!


Ostapuk Ivano's picture

Is anyone worried about a May 1 terrorist attack? That whole bin laden anniversary thing?

Ostapuk Ivano's picture

Whats with the negative rating? I thought it was a legit questions.

gdogus erectus's picture

Because fear is a control mechanism.  Keeps us begging for more drone killings and trillion dollar defense budgets that requires "us" to print money and pay interest to the borg.