The Association of Managers in Chicago reported that the price index decreased moderately in may, dropping below the neutral 50 mark, which separates expansion of activity from contraction.
According to the index of purchasing managers Chicago fell in may to the level of 49.3 vs 50.4 points in April. Analysts had expected the index to rise to 50.9 points. The latest reading was the lowest since Feb. In addition, in may was recorded the sixth contraction in the last 12 months. Recall that this index is closely watched because it is published shortly before the release of PMI and ISM can give the idea of what will be the indicator of business activity at the national level.
The company said that four of the five components of the index showed a reduction during the period from April to may. Above the neutral mark of 50 points leaving only the sub-index of the supply. At the head of the fall were sub-index of production (it reached the lowest level since Feb) and the sub-index of new orders, which fell to its lowest level since December 2015. In contrast, the rate of incomplete orders grew by 9.0 points, but remained below 50 points for the 16th month in a row. Sub-employment index also improved slightly, but remained on the territory of a reduction in 10-th time in the last 12 months. The index of inventories fell in may by 11.7 points, reaching the lowest level since November 2009 and demonstrated the seventh reduction in a row. Experts point out that the weakness of stocks could mean uncertainty about future growth in new orders. The data also showed that 68.7% of respondents do not plan to increase investment in the business over the next six months.