Economic Release
US: Chicago PMI
Date: March 31, 2025 08:45 AM CT
| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Index | 44.1 | 43.0 to 45.5 | 47.6 | 45.5 |
Highlights
The PMI Chicago index improves marginally to 47.6 in March from 45.5 in February, slightly better than the 44.1 in the Econoday consensus forecast. The Chicago index, which includes both services and manufacturing firms, shows contraction continues but a bit more slowly than in February. After many months of sequential declines, activity has fallen to low levels and continues to shrink.
In the past, some forecasters regarded the PMI Chicago report as a bellwether for the much more significant national Institute for Supply Management manufacturing index, which is due for release on Tuesday, and should attract much more attention. Given the inclusion of services firms and lack of transparency as to the proportion of services versus manufacturing, plus uncertainty over sample size, PMI Chicago is not now regarded as much of a guide to the ISM.
In the past, some forecasters regarded the PMI Chicago report as a bellwether for the much more significant national Institute for Supply Management manufacturing index, which is due for release on Tuesday, and should attract much more attention. Given the inclusion of services firms and lack of transparency as to the proportion of services versus manufacturing, plus uncertainty over sample size, PMI Chicago is not now regarded as much of a guide to the ISM.
Market Consensus Before Announcement
The index is expected down at 44.1 in March from 45.5 in February, another dismal showing.
Definition
The Institute For Supply Management - Chicago compiles a survey and a composite diffusion index of business conditions in the Chicago area. Since October 2011, the survey has been conducted by Market News International. Manufacturing and non-manufacturing firms both are surveyed. Hence, it is not directly comparable to pure manufacturing surveys. Readings above 50 indicate an expanding business sector.
Description
Although the report is commonly referred to as the Chicago PMI, the official name of this report is ISM - Chicago. ISM stands for Institute For Supply Management while PMI is shorthand for purchasing managers' index.
Investors should track economic data like the Chicago PMI to understand the economic backdrop for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a moderate growth environment that will not generate inflationary pressures. The Chicago PMI gives a detailed look at the Chicago region's manufacturing and non-manufacturing sectors. Many market players, focused on manufacturing, don't realize that non-manufacturing activity is covered in this index. On its own, it can be viewed as a regional indicator of general business activity. Some of the Chicago PMI's sub-indexes also provide insight on commodity prices and other clues on inflation. One should be aware that this report is released to private subscribers several minutes prior to release to the media. This may account for occasional market activity just prior to public release.
This survey is somewhat local in nature, reflecting overall economic activity in the Chicago area. But many see the Chicago PMI as being representative of the overall economy.
Markets focus on the overall index - the Business Barometer which many refer to as the Chicago PMI. The breakeven point for the index is 50. Readings above 50 indicate positive growth while numbers below 50 indicate contraction. The farther the reading is from 50, the more rapid the pace of growth or decline.
Investors should track economic data like the Chicago PMI to understand the economic backdrop for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a moderate growth environment that will not generate inflationary pressures. The Chicago PMI gives a detailed look at the Chicago region's manufacturing and non-manufacturing sectors. Many market players, focused on manufacturing, don't realize that non-manufacturing activity is covered in this index. On its own, it can be viewed as a regional indicator of general business activity. Some of the Chicago PMI's sub-indexes also provide insight on commodity prices and other clues on inflation. One should be aware that this report is released to private subscribers several minutes prior to release to the media. This may account for occasional market activity just prior to public release.
This survey is somewhat local in nature, reflecting overall economic activity in the Chicago area. But many see the Chicago PMI as being representative of the overall economy.
Markets focus on the overall index - the Business Barometer which many refer to as the Chicago PMI. The breakeven point for the index is 50. Readings above 50 indicate positive growth while numbers below 50 indicate contraction. The farther the reading is from 50, the more rapid the pace of growth or decline.
