Today’s release of the Chicago PMI for the month of March was a big disappointment for the second month in a row. While economists were expecting the headline reading to rebound up to 51.7 from last month’s abysmal reading of 45.8, the amount of improvement was considerably less as the headline index came in at just 46.3. Outside of last month’s level, it was the lowest reading for the index since July 2009. As shown in the table to the left, which is taken from our Economic Indicator Database, this morning’s report was also notable due to the fact that it is the first time since at least 1998 that the headline reading for the Chicago PMI report was more than five points below consensus expectations. Misses like the one we saw this morning are uncommon enough, but to have two misses of this magnitude in back to back months is almost unheard of.
So how often do we see back to back sub 50 readings in the Chicago PMI and when do they occur in the business cycle? Earlier today, we send out a B.I.G. Tips report to clients highlighting each occurrence within the framework of economic expansions and recessions. To view that report, please click on the link below. If you are not currently a subscriber and would like to try out the service, sign up for a free Bespoke Premium trial today.