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Chicago PMI reached neutral territory
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The Chicago Purchasing Managers reported the CHICAGO BUSINESS BAROMETER brokethrough ten consecutive months of decline to reach neutral territory, establishing the first evidence of the possible end of the 2007-2009 Great Financial Recession.
BUSINESS ACTIVITY:
PRICES PAID deflation risk ebbed;
NEW ORDERS and PRODUCTION 1st time in a year both indexes were above 50;
EMPLOYMENT and INVENTORIES indexes continued to retreat.
BUYING POLICY:
Only lead-times for M.R.O. SUPPLIES remained at historically average levels.
The August CHICAGO BUSINESS BAROMETER™ reached equilibrium as the number of businesses contracting equaled the number of businesses expanding. However, we won’t know the recession is over for a number of months. The end of the recession, like it’s beginning, will be determined by a committee of experts convened under the auspices of the National Bureau of Economic Research (N.B.E.R.). Based on the popular shorthand of a recession simplistically characterized as two quarters of economic decline (“two quarters of negative economic growth”), symmetry would argue that we will not know if the recession had ended until early next year.
Posted: August 31, 2009 Monday 10:00 AM