Chicago PMI Plummets By Most In Over 4 Years; Weather Blamed

Tyler Durden's picture

A devastating 49.0 in April, a surge to 58.7 in May, and then a crash right back to 51.6 in June, far below the expectation of a 55.0, and just above the lowest economist forecast of 51.5. This was the biggest monthly crash in over 4 years. What's another name for this hilarious data series? Why the Baffle with BS Index of course, or Chicago PMI for short. What many saw as definitive proof of an industrial rennaissance in the May number (which only led to a huge ISM disappointment), will mean the economy stasis continues which should at least be good for the market. And since Baffle with BS must continue, look for the Mfg ISM, for which Chicago is a leading indicator, on Monday to be a solid beat. As for the PMI, fear not: it's the weather's fault.

From the report:

The Chicago Business BarometerTM declined to 51.6 in June, the largest monthly drop since October 2008, and down from a 14-month high of 58.7 in May. The gyrations seen over the past few months are not typical for the Barometer and some of this might be attributable to the unseasonable weather conditions.


Of the five Business Activity measures which make up the Barometer, four declined with only the Employment indicator posting an increase. Order Backlogs plunged deep into contraction to the lowest level since September 2009 and was the single biggest drag on Barometer. Faster Supplier Delivery times and declines in Production and New Orders also contributed to the Barometer’s weakness.


Prices Paid posted the second consecutive monthly increase, following a lull in April, putting it back in line with levels seen at the start of the year.


Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist at MNI Indicators said:


“Activity dropped back in June following the large rise in May. The trend level of the Barometer has picked up since the fourth quarter of 2012, and while these latest data point to some weakening between the first and second quarter, it is too early to say if this will continue.”

It will.


Order backlogs are at their worst since Sep09 and this drop in the headline number is the worst since Nov08...


Charts: Bloomberg

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IridiumRebel's picture

Yep, nothing to do with being utterly afraid of being shot in Murder City.

camaro68ss's picture

hahaha, weathers to normal for this time of year.

I think I’m just going to sit on my wallet and not buy anything.

Divided States of America's picture

But the Blackhawks just won Stanley Cup. Wont those riots and parades help economic developments there???

fonzannoon's picture

THese mining stocks better not be fucking with me. I'm fragile.

LawsofPhysics's picture

ditto, I could killed on that part of the portfolio.  never thought "price" could stay below production costs for this long.  insane.

Dr. Engali's picture

According to CNBS the production cost is bullshit, because there hasn't been any inflation. Just look at the falling price of teeveees to prove their point.

NoDebt's picture

Damned weather again.  Everyone bitches about it, nobody does anything about it.

Doc- sale on flat screens at Best Buy this weekend.  You can get a 60" for a shoebox full of dryer lint.  Inflation- bah!

Can we have an inflation index that excludes Consumer Stupidity items like iPads and TVs?

fonestar's picture

fonestar is forecasting a 97% chance of fire and brimstone with light showers.  Latter in the evening we should be passing the circle of flatterers and heretics into the inner circles of hell....

worbsid's picture

When the spooks play the HAARP everyone bitches and when they don't play the HAARP everyone bitches. 

Debt-Is-Not-Money's picture

"Wont those riots and parades help economic developments there???"

Yeah, to hell with the "Broken Window" theory, bring on the Broken City, Broken State and Broken Country  theories!

Hal n back's picture

I thought folks on unemployment for 99 years had to prove they were actively looking for a job on a regular basis and a rally does not fit into a schedule

LawsofPhysics's picture

Exactly.  Here are my plans;

The fed can "jawbone" so long as the treasury and CONgressional puppets for the financial sector don't have to deal with the debt ceiling etc.  They can pilage pensions etc. for about five more months.  So in my view that as long as the bond "rout" can last then those interest rates must be beaten back down.  If the "markets", pensions, and 401ks must be sacraficed in order to do that, the financial sector will make sure their politcal puppets in Washington make sure it happens.

"Invest" accordingly.  Hey look, gold and silver are one sale...

Dr. Engali's picture

I haven't seen you around in a while. I thought you might be enjoying your new FEMA facilities.

LawsofPhysics's picture

No just busy.  Heavy rains really screwed with us recently.  Remember, the only thing more unpredictable than the Fed manipulation is the weather.

CrashisOptimistic's picture

LoPdood, lemme offer up some ancillaries.

The GOP is going into these debt talks upcoming, not to mention the overall FY2014 budget framework pre Oct 1, with a national interest expense that has blown up.  I'd guess an extra $100 billion on the 17T debt from the recent yield runup.

This emboldens their position.  Spending is growing in things we can't control, so we gotta cut those things we can control.  Obama is walking into those talks wanting to rein in the Sequester (which somehow people manage to forget cuts ANOTHER 120 B off the baseline next year (and 120B/yr for the next 9 yrs), BEYOND the paltry 56B that was cut this year).

Sooo, G in the GDP equation is what it is and down goes that 1.77% GDP growth number from Wednesday.

That should be bullish for bonds, except for one thing.  1.77% came out Wednesday.  Bernanke spoke last Thursday.  He ***had*** to already know that number when he put QE's end on the table, and my read is simply this -- he has to end QE for reasons non economic about which we have not yet been told.  There's really no other explanation for him to talk so loudly about taper when HE HAD THE 1.77% NUMBER ALREADY.


LawsofPhysics's picture

The Fed is still buying 85 billion in in MBS and bonds, this is fact.  Taper talk, is just that, talk.  The issuance of debt is where the rubber meets the road.  In a "debt as money" system, sovereign debt must continue to expand or the whole ponzi implodes, period.

Element's picture

hmmm ... weather ... all that tornado damage should have provided a nice smashed-window upside somewhere

disabledvet's picture

does the Fed even have a choice....

Midasking's picture

One of these quarters when we don't have any "weather" the economy is going to rock!

thismarketisrigged's picture

who cares about data, that does not truly show how the economy is,  the fed is what matters.


now can they please trot out some fed members to explain to me what ben bernanake really meant in his speech 2 weeks ago, because i dont think i understood him?

Smegley Wanxalot's picture

What?  Bad news? This is good for at least 300 point up on the dow

Dr. Engali's picture

So according to the now day trading Bernank he should be buying moar. Then again consumer sentiment just beat so he should taper today. I'm so fucking confused.

bnbdnb's picture

Taper, no, taper, yes, taper, no, taper, yes,

Taper, no, taper, yes, taper, no, taper, yes,

Taper, no, taper, yes, taper, no, taper, yes,

Taper, no, taper, yes, taper, no, taper, yes,

Taper, no, taper, yes, taper, no, taper, yes,

Taper, no, taper, yes, taper, no, taper, yes,

Taper, no, taper, yes, taper, no, taper, yes


My God, just shutup.

Never One Roach's picture

My barber told me they're are not going to taper. He's been more accurate then any mutual fund manager on TV or that I've had in real life.

Colonel Klink's picture

Only thing tapering is this turd of an eCONomy!

Undecided's picture

I seem to be having more boating accidents lately...

nmewn's picture

Manic Depressive Stock Market To Rally On Moar Bernanke Counterfeiting Hopes.

I could probably write these headlines with a little more practice ;-)

e-recep's picture

bernanke's fart is causing windy conditions.

Inthemix96's picture

Whats PMI stand for peeps?

Pre-Menstral Idiocracy???

Help a friend out here for gods sake.


buzzsaw99's picture

It means get out there and buy some Turtle Wax with your credit card.

yogibear's picture

According to the Illinois  state politicians more taxes, fees and higher pensions and wages for public employees solves everything.

Any wonder why people are fleeing the state and the population is decreasing?

In some respect the taxes are worse in Illinois than California. Some the highest gasoline and sales taxes in the country.


rosiescenario's picture

As a CA resident it appears that Texas is sucking away CA's business which can no longer afford the hoop jumping regs imposed by Sacto....but our governor had to send a contingent to Texas to research this....they should have looked at themselves.


Instead of asking "What is Texas doing to attract business and start ups?" they should be asking "What is California doing so wrong that it would drive people to move to the wastelands of Texas?"


The answer is, it is not so much taxes as the incredible anti-business regulators who cannot discern a golden goose from a chicken dinner.

AynRandFan's picture

NPR did a piece this morning saying that a carbon tax would be good for the economy because it would take money from oil consumers and rebate it via income taxes.

This is what passes for "journalism" by grads of the University of Missouri.

buzzsaw99's picture

It was me, I bought an appliance from Sears a month ago but didn't buy anything in June. So solly.

Caviar Emptor's picture

Look we don't need to make anything as long as house prices and stocks go up and up. We'll trade stocks to one another

Rayfp65's picture

Why doesn't the Fed try manipulating the weather, it's pretty good at almost everything else!

Maybe Ben and Mother Nature can sit down for a quiet evening together, have a few drinks and discuss the matter!  What do PHD's drink anyway? I know, their own urine, this way they don't piss away any brain cells, they just get recycled over and over.


When stocks were climbing, everyone said it can't last, well it's lasted a pretty long time,  now everyone is saying bond yields can't keep rising!  I wonder what will happen???

walküre's picture

Look, at least they beat the consensus number of 51.5 by a nominal .1 at 51.6

The Koreans last night fucked up completely as their consensus was much bigger than what the actual number was.

This is where you can identify the pros from the amateurs.

A pro always beats the consensus.

bdub2's picture

People say Americans don't have a solid manufacturing base anymore as it was gutted and pimped out through years of spineless corruption. This is a lie. We manufacture bullshit. We make up bullshit numbers, and shovel out healthy heaps to citizens both home and abroad. 

Our markets clearly show this is most important in a dieing, er thriving economy.  BS-American Made.

Lilguy's picture

Hot, cold, wet, dry, tornadoes, hurricanes, blizzards, deroches (forchissake!) sunshine, lollipops, rainbows...

It's always the EF-ING WEATHER!

orangegeek's picture

It's not the weather.  That's just silly.


Chicago Black Hawks won the cup.  Everyone is too busy celebrating.  People don't show up for work.

Curt W's picture

A sheeps long-term memory may be a bit hazy, but I swear we had weather before 2008, I even think I recall a time when it snowed in the spring-time way back in the 90's.

PaperBear's picture

Was this what has caused gold and silver to go up just now ?

rosiescenario's picture
Chicago PMI Plummets By Most In Over 4 Years; Weather Blamed


.....which Obummer just told us 2 days ago is really the fault of the evil coal there it is, coal miners have created our economic catastrophe.

Bansters-in-my- feces's picture

Speaking of "weather"

Anyone seen the real macoy lately (the last few years)

We are being assaulted every day by "Geoengineering"

Synthetic clouds and "extreme weather" is the new norms.

Fuck you .to anyone involved in this terrorism.

Ying-Yang's picture

Nice batch of chemtrails this morning...(cough)


Should the spraying of barium and aluminum oxide be considered hazardous by the EPA?


A nice mix of Heavy Metal music for you and the kids to ingest.

Never One Roach's picture

IBM and Blackberry getting Monkeyhammered today  in the early stages of the "Summer of Recovery."