Chicago PMI Beats All Expectations As Stagflation Signals Flash Red

Having collapsed back to the not-so-ebullient reality of ‘hard’ macro data, ‘soft’ surveys have staged another rebound recently.

And today’s Chicago PMI did not disappoint – soaring to 64.1 (against expectations of a drop from May’s 62.7 to 60.0).

This print was above all expectations (forecast range 58 – 62.7 from 28 economists surveyed) and confirmed the 12th month in a row of business expansion.

Under the hood:

  • Prices paid rose at a faster pace, signaling expansion

  • New orders rose at a faster pace, signaling expansion

  • Employment rose at a faster pace, signaling expansion

  • Inventories rose at a slower pace, signaling expansion

  • Supplier deliveries rose at a faster pace, signaling expansion

  • Production rose at a slower pace, signaling expansion

  • Order backlogs rose at a faster pace, signaling expansion

Production growth slowing as prices accelerate – stagflation anyone?

So, dead cat bounce of hope? Or a new renaissance in the recovery?

All the time the yield curve is crushing new lows, we suspect the former, not the latter.

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