Updated: 26-Feb-10 10:29 ET

February Chicago PMI

Updated: 26-Feb-10 10:29 ET

Highlights

• The Chicago PMI, which is compiled by the Institute for Supply Management - Chicago and Kingsbury International, Ltd., posted a surprise increase from 61.5 in January to 62.6 in February.
• The consensus estimate called for a decline to 59.7.

Key Factors

• The index remained strong on all fronts.
• While the rate of growth in production and new orders declined in February, the indices both remained above 60 at 65.2 and 62.2, respectively. Even if growth continues to slow at its current pace, it would take at least 6 months before production and new orders turn negative.
• Employment growth slowed, but remained above the 50 threshold at 53.0.
• Backlogs posted significant growth for the third consecutive month as the index increased from 54.3 to 58.5. A steady supply of backlogs will help production remain strong in the event of an unexpected downturn in orders.
• Supplier deliveries rose to its highest point since November 2005 as the index increased from 55.3 to 62.6.

Big Picture

• The Chicago PMI has little overall economic value, and is only watched by the financial markets because it is usually released one day in advance of the similar national ISM manufacturing survey.  A significant move in this regional survey will therefore sometimes be seen as having predictive value for the ISM index.

Category	FEB	JAN	DEC	NOV	OCT
Chicago PMI	62.6	61.5	58.7	55.5	53.2
New Orders	62.2	66.4	64.4	62.0	60.2
Production	65.2	66.6	64.2	59.0	63.2
Employment	53.0	59.8	47.6	42.4	38.1
Prices Paid	67.7	66.2	55.6	51.7	49.4