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The Chicago Purchasing Managers Index for the month of April came out as recessionary, or in contraction. This is yet another regional economic report confirming that weakness is ruling the roost. Overall the index fell to 49.0 in April from 52.5 in March. This is a low this index has not seen for three and a half years, and all business activities measured showed weakness in April. Five of the seven components are now in contraction.

Another component of inflation came crashing down as well, in part due to lower commodity prices. The price paid figure fell to 51.0 in April from 61.0 in March. Supplier deliveries also came tumbling down to 47.9 in April from 58.0 in March. New orders was the only index to post a gain, and even that was a tiny gain, rising to 53.2 in April, versus 53.0 in March. Order backlogs are now in contraction for 10 of the past 12 months.

We have a real concern here about the employment component with a three-month consecutive drop. The April Employment Index within the number fell to 48.7 from 55.1 in March. That represents contraction in employment at a time when most other employment readings are remaining in positive territory.

This is just one regional report, but it aims to be a leading indicator, and it confirms the weakness seen in other regional measures.