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 free fall.
Easy Money 