Nov 1, 2019

The Chicago PMI report was a mitigated disaster

Data: Investing.com; Chart: Andrew Witherspoon/Axios

Ahead of Friday's ISM manufacturing report, the Chicago Business Barometer, a separate reading that tracks manufacturing companies based in the Midwest, produced its weakest reading in four years and the second lowest in a decade.

Threat level: The details of the report, also known as the Chicago PMI, were even worse.

  • New orders declined to 37.0, the lowest since March 2009.
  • Order backlogs fell almost 14 points to 33.1.
  • Prices at the factory gate fell for the third consecutive month.
  • The three strongest categories highlighted in a press release from the Institute for Supply Management — employment rose to 49.8, inventories moved up for a third month to 47.1, and production bounced to 46.8 — were all still below 50, the marker separating expansion from contraction.

Yes, but: The United Auto Workers strike at GM, which included nearly 50,000 workers and idled 34 plants across the country, likely contributed to the weakness.

  • The numbers should improve now that the union has agreed to contracts with GM and Ford.

The intrigue: It also appears business owners who participated in the survey are feeling the sickness but are dubious of the medicine.

  • In response to the question of how government-imposed tariffs would affect their firm’s business, 82.5% of respondents said it would have a negative impact (56.5% noted a little negative impact and 26% indicated a major negative effect).
  • October’s special question asked: “What impact would the latest interest rate cuts by the Federal Reserve have on firm’s business?” The majority (51.1%) expect no impact, while 31.1% state a positive effect.

Go deeper

The U.S. services sector bounces back

Data: Institute for Supply Management; Chart: Andrew Witherspoon/Axios

The U.S. services sector roared back in October, with the ISM's non-manufacturing report jumping to 54.7, up from 52.6 the month before, and beating expectations.

Why it matters: The services sector makes up almost 70% of the U.S. economy and has been consistently trending lower, following the manufacturing sector for most of this year.

Go deeperArrowNov 6, 2019

China's manufacturing is pushing higher while the U.S.'s is sinking

Data: Caixin, Institute for Supply Management; Chart: Andrew Witherspoon/Axios

Manufacturing industries in the U.S. and China seem to be moving in opposite directions. In October, a private company survey of China's factory activity shows it expanded for a third consecutive month, while U.S. manufacturing contracted for the third month in a row.

Why it matters: October was the largest deficit the U.S. manufacturing industry has had with China in the nearly eight-year history of the Caixin survey.

Go deeperArrowNov 4, 2019

October jobs report surprises with 128,000 jobs added

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. economy added 128,000 jobs in October — more than the 75,000 economists expected — while the unemployment rate ticked higher to 3.6%, the government said on Friday.

Why it matters: The strong numbers come despite job growth held down by the 40-day United Auto Workers strike against General Motors, which has since ended.

Go deeperArrowNov 1, 2019