In a massive downside surprise, the Chicago PMI survey just printed 37.2 (vs 47.0 expectations), plunging to its lowest level since the peak of the COVID lockdowns in 2020. This was below the lowest estimate of 25 economists surveyed.
Source: Bloomberg
Under the hoods was not pretty:
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 slower pace; signaling contraction
Inventories rose at a faster pace; signaling expansion
Supplier deliveries fell and the direction reversed; signaling contraction
Production fell at a faster pace; signaling contraction
Order backlogs fell at a faster pace; signaling contraction
In 55 years, this level of Chicago PMI has never not failed to coincide with a recession.
