Chicago PMI Plunges To Lowest In 4 Years

After slumping into year-end, Regional Fed surveys have (surprisingly) exploded higher this month with Richmond and Philly surveys spiking almost by the most on record.

Today's Chicago PMI was expected to follow suit - though less excitedly - with a modest gain but instead it missed massively, plunging to its lowest since Dec 2015 - printing 42.9 vs 48.9 expectations.

Source: Bloomberg

This was the biggest miss of expectations since Dec 2015...

Source: Bloomberg

None of the underlying components rose in December:

  • Business barometer fell at a faster pace, signaling contraction

  • Prices paid rose at a slower pace, signaling expansion

  • New orders fell at a faster pace, signaling contraction

  • Employment fell at a faster pace, signaling contraction

  • Inventories fell at a faster pace, signaling contraction

  • Supplier deliveries rose at a slower pace, signaling expansion

  • Production fell at a faster pace, signaling contraction

  • Order backlogs fell at a faster pace, signaling contraction

Having tumbled by the most in 39 years last year, Chicago PMI has no been in contraction (sub-50) for 7 months in a row - something it has not done outside of recession... ever

Source: Bloomberg

As a reminder Dec 2015 was the last time China's economy was in freefall.