The Chicago Institute for Supply Management’s Purchasing Managers Index for August cooled off to a seasonally adjusted reading of 53.0 in August, compared to the 53.7 reading in July. The August number fell short of consensus forecasts for a reading of 53.2. Any reading above 50.0 indicates expansion.
The index for production rose to 57.4, from 54.5 in the previous month. New orders climbed to 54.8 in August from 52.9 in July. However, the index for order backlogs plunged to 41.7 from 52.8, the third time this year it has significantly declined and the lowest reading since Sept. 2009. The employment reading jumped to 57.1 from 53.3, recovering more than half of last month’s retreat.
Economists watch the regional manufacturing reports for any early signals on the national outlook. The Chicago index includes manufacturers and service providers with operations in the United States and abroad, making the gauge a measure of overall growth.