Chicago PMI below 50/UoM confidence

After NY, Philly, Dallas and Milwaukee mfr’g survey’s pointed to contraction and KC and Richmond showed growth, the Chicago mfr’g PMI was below 50 for the 1st time since Sept ’09 at 49.7. New Orders fell 7.4 pts to 47.4 while Backlogs remained well below 50 at 41.6 vs 41.7 in Aug and 52.8 in July. Employment fell by 5.1 pts to 52, the lowest since Mar ’10. Inventories were little changed at 51.1. Prices Paid rose by 6.2 pts to 63.2, a 5 month high. Bottom line, manufacturing at the national level has been slightly below 50 for the past 3 months and the regional survey’s in Sept point to something similar. Monday’s ISM expectations are for a reading of exactly 50 vs 49.6 in August, 49.8 in July and 49.7 in June. Separately, the final Sept UoM confidence survey at 78.3 was a touch below estimates of 79 and down from the preliminary report of 79.2 but still up 4 pts from Aug. The biggest change from the preliminary Sept reading was in Current Conditions which fell 3 pts from Aug instead of just .4. The Outlook was little changed from the preliminary and up 8.4 pts from Aug. One yr inflation expectations fell to 3.3% from 3.6% in Aug and are now in line with the 12 month avg. While moderated somewhat from the 1st look at UoM confidence, the final Sept figure follows the Conference Board improvement but is only a coincident snap shot indicator and not leading.

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