"Economic growth in the US appears to have picked up a little at the end of the third quarter," reports MNI as September's Chicago Fed ticked up to 54.2 (better than the 52.0 expectations). Most subindices rose but notably employment fell. While excuses grow around the nation for disappointing data, 79% of Chicago panellists said the run-up to November Presidential Elections is having a negligible impact on business.
As MNI reports, on a trend basis, the MNI Chicago Report paints a slightly better picture than earlier in the year with the Barometer averaging 53.8 in Q3, up from 52.2 in Q2 and the highest quarterly level since Q4 2014.
The latest increase was driven by a sharp gain in Production, which rose 7.3 points to 59.8, the highest since January 2016. The relative weakness in output earlier in the year as well as a marginal advance in New Orders between August and September tempered somewhat the latest pickup in Production.
New Orders and Order Backlogs, which led the Barometer's decline last month, were little changed in September, with the latter failing to bounce back above the 50 breakeven level. Employment was the only Barometer component that fell on the month, having rallied to a 16-month high in August.
Meanwhile, Supplier Deliveries lengthened to the highest level since May 2016. Some companies reported difficulties in getting MRO supplies, with times to source at the longest since September 2015. Some suppliers and manufacturers said they may have been notified up to a month ago that there were issues with Hanjin shipping. "We're are watching for the effects of the Hanjin shipping on moving goods here from China," said one panelist.
An equal number of firms reported increasing inventories as decreasing them, with the Inventories indicator rising just above 50 in September, having edged into contraction territory in August.
Prices Paid rose slightly, indicating early signs of pipeline inflationary pressures, after four consecutive monthly falls left the indicator running at a five-month low.
In response to September's special question, 79% of Chicago panellists said the run-up to November Presidential Elections is having a negligible impact on business.
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