Chicago PMI Unexpectedly Plummets, Longest ‘Contraction’ Streak Since Lehman

After the unexpected resurgence in April, Chicago PMI plunged in May from 48.6 to 40.4 (against expectations of 47.3). That is the ninth straight month below 50 (in contraction)…

Source: Bloomberg

That is the longest streak of prints in ‘contraction’ since the Great Financial Crisis.

Under the hood, none of the underlying drivers were higher MoM…

• Prices paid rose at a slower pace; signaling expansion

• New orders fell at a faster pace; signaling contraction

• Employment fell and the direction reversed; signaling contraction

• Inventories fell at a faster pace; signaling contraction

• Supplier deliveries rose at a slower pace; signaling expansion

• Production fell at a faster pace; signaling contraction

• Order backlogs fell at a faster pace; signaling contraction

This continues a trend of ‘soft’ survey data disappointing notably.