Chicago Purchasing Managers’ Index (Chicago PMI)

The Chicago Purchasing Managers’ Index (PMI), also known as the Chicago Business Barometer, is a monthly economic indicator that measures the economic activity of the manufacturing sector in the city of Chicago, United States. It is released by the Institute for Supply Management (ISM) Chicago.

The Chicago PMI is based on a survey of purchasing managers who provide data on various aspects of their business activity, including new orders, production, employment, supplier deliveries, inventories, and prices. These managers represent a diverse range of industries, including manufacturing, retail, construction, and services.

The index is calculated using a diffusion index methodology, where a reading above 50 indicates expansion in the manufacturing sector, while a reading below 50 indicates contraction. The further away from 50 the index is, the stronger the expansion or contraction is perceived to be. For example, a reading of 55 indicates a higher level of growth than a reading of 52.

The Chicago PMI is considered a leading indicator of economic health, as it provides insights into the overall state of the manufacturing sector, which can have a significant impact on the broader economy. The manufacturing sector is closely tied to employment, investment, and consumer spending.

Traders, economists, and policymakers closely monitor the Chicago PMI as it is released shortly before the national PMI, providing an early indication of the health of the manufacturing sector in the United States. It can also influence market expectations and investor sentiment, leading to potential movements in financial markets, such as stocks, bonds, and currencies.

In summary, the Chicago PMI is a key economic indicator that measures the economic activity of the manufacturing sector in Chicago. It provides valuable insights into the health of the broader economy and is closely monitored by market participants and policymakers.