We can add the Chicago again to the list of regional manufacturing surveys that now reflect contraction in July. The Chicago PMI fell to 44.4 from 49.7 in June and that’s the weakest since December 2015. Of the 5 main components, 4 were below 50 with supplier deliveries the only one above. In response to a special question, “Two in five firms expected the economy to see slower growth than currently, with some holding tariffs responsible for the slowdown. The majority, at 46%, did not expect any change while only 14% expected the economy to pick up.”
I’ll leave it the senior economist of MNI for the bottom line: “Sentiment faded further with firms facing weakness across the board. Global risks, trade tensions, slowdown in demand and somber growth expectations, all jeopardize business conditions. Firms are not panicking yet, but the latest report isn’t adding to the cheer.” Again, the question now is to what extent this further infects the services side of the US economy.
CHICAGO MFR’G PMI