Chicago PMI unexpectedly plummets to 42.9, its lowest since 2009

[marmar]

(MarketWatch) Economic activity in the Midwest contracted at the fastest pace in more than six years in December, according to the Chicago Business Barometer, also known as the Chicago PMI.

The index fell to 42.9 from 48.7 in November. Economists had expected it to rise 1.3 points to 50 in the December reading. The index has spent much of the year below the 50 mark that separates expansion from contraction.

Order backlogs were the biggest drag in December, dropping 17.2 points to 29.4. That’s the lowest since May 2009 and marked the 11th-straight month in contraction. The last time such a sharp decline was registered was 1951. ...............(more)

http://www.marketwatch.com/story/chicago-pmi-plummets-to-429-lowest-since-2009-2015-12-31

[LiberalArkie]

1. Is it 2008 all over again? No one could have ever predicted that this could happen.

[Wellstone ruled]

2. Interesting.

January numbers will tell the real story. The Back order numbers seem odd. Commodities are in free fall due to China's ongoing implosion,and the Midwest Mining Industry is pretty much in lay off mode.

[forest444]

3. The Purchasing Managers' Index can be misleading.

Since "sentiment" weighs heavily in the index.

Besides being far too subjective a variable, sentiment can also be influenced by the fact that most purchasing managers are brainwashed Republicans.

I remember the PMI just plummeting in the months leading up to the 2000 election (widely publicized by the media at the time to the point of hysterics); but declining only slowly during the 2008 collapse (once elections were out of the way, their index crashed too of course).